Small business tax deductions aren’t as hard as most companies think if you read this article to the end.
Did you know that about 45 percent of small businesses fail within the first five years?
Running a business is a complicated process, and only grows more complicated when you have to worry about taxes. It can also be quite stressful as a small business owner when you aren’t sure what you’ll have to owe depending on your income status that year.
There’s an entire section in the IRS tax code that’s specifically devoted to small businesses. This article details some common small business tax deductions you can write off on your tax return. It’s important that you understand how to write off these expenses so that you don’t have to worry about them when tax season rolls around!
Keep reading to learn more about the tax deductions small businesses can write off and how to claim them so that you can owe less money back to the government.
Home Office Deduction
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The cost of any workspace that you use can be written off as a home office deduction. In addition to the space itself, you can also write off the utilities you use in the space, insurance, and even mortgage interest that you may have.
While much of this is on the honor system, you will have to be able to back up your statements if the IRS does happen to contact you about your home office deduction.
Phone Bills Deduction
If you are using your phone for your business most of the time, you can write off many of your phone bills. Just be sure that you aren’t deducting the entire thing if you also use it for personal use as well.
Restaurant Deduction for Business
If you are eating out for a business meal, you can deduct the meal. You cannot, however, deduct any “in-office” meals.
It is always a best practice to save your receipts in case of an audit.
If you have to travel for your business, you can deduct many of these expenses from your taxes.
However, there are a few criteria this needs to meet. You have to be outside of your taxable city, you must spend a night (or some type of sleep) away, and must last longer than a typical workday.
When traveling, you have to be conducting business, though. It cannot be for pleasure!
When you travel for work on a daily basis (or even just sometimes), you can write off a vehicle deduction from your taxes.
Be sure to keep track of your mileage, dates, and purpose of each trip to be able to successfully write it off. You can learn more here about the specific forms.
Small Business Tax Deductions
When you are a small business, anything helps you to stay afloat, especially business tax deductions.
When you know how to properly do taxes for business ownership, you can save yourself a lot of money in the long run, and only pay what you actually need to pay to the IRS.
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