10 Little known deductions small businesses can take
As a small business owner, every little cent you can save will help – especially if your business is in its first or second year and you’re still trying to get it off the ground. One way that you can save some money is by taking certain deductions on your small business taxes. The following are ten deductions you can take that you may not have known about:
- Home office – If you have an office at home that you use for your small business, then you may be able to deduct it as a business expense. This can only be done if the space is used exclusively for your business. For example, you can’t write off the space of your living room just because you use your laptop on the couch every once in a while. If you have a room in which you have a desk set up exclusively for your business work but the other half of the room is a guest bedroom, then you can only write off a section of that room.
- Office furniture – Any furniture that you purchase for the exclusive use of your business can be written off. You have two options when it comes to writing off business furniture – you can write it off 100 percent in the year you purchased it or you can deduct a portion of the expense over a period of seven years, which is known as depreciation.
- Equipment – Any equipment bought for your business can be deducted 100 percent or write off as a depreciation over time.
- Business entertaining – If you go to dinner with a potential client in an attempt to get their business, you can deduct 50 percent of the tab you picked up. Just keep in mind that any entertainment you deduct must take place right before or after a business discussion.
- Travel – Any travel expenses paid for your business can be deducted as long as the trip’s primary purpose was for business. This means that if you fly to another city for a meeting with a potential client, you can deduct everything from your plane ticket and taxi fare to your lodging and meals.
- Education – If you pay for continuing education that is related to your current profession or business (and not for a new job or business), then you can deduct the expenses.
- Advertising – Any money you spend on advertising, whether it’s running ads or investing in business cards, can be deducted as a current expense.
- Driving-related expenses – If you drive for your business, whether it’s driving somewhere to do business with a client, performing a delivery service or shipping a product, to name a few possibilities, then you can deduct things like gas, toll fees, parking costs, repairs and insurance.
- Insurance premiums – If you are self-employed and paying for your own health insurance, you can deduct this 100 percent.
- Phone charges – Any business calls you made from home can be deducted. You will need to keep track of all business calls so that you can add them up. You can write off 100 percent of these calls. Regular phone line fees and charges don’t count to your deduction. However, if you install a second line, you can deduct all of these charges. You can also claim cell phone calls as a tax deduction.
These are ten tax deductions you may be able to take for your small business. To find out if you can deduct any of these items or if you want professional advice in regards to small business tax planning in general, be sure to contact us at Valezar & Associates today