If you are a small business owner preparing to file your small business taxes, the team here at Tax Alternatives want to ensure that you are aware of what tax deductions you can apply directly to your small business. As most of us know, these deductions ultimately decrease your overall taxable income, allowing more of your earned money to stay in your bank account. There are a number of common deductions that small business owners can take and our team has put together a useful list to help small business owners better understand their options.
Notable Tax Deductions You May Be Missing Out On
At Home Office Tax Deductions – There are a number of home office expenses that can be written off as small business deductions. However, it is important to understand that the only costs you can deduct are those that are directly related to your home office. The space in your home designated as your office must be used entirely for your business transactions and operations. In addition, this space must be the primary location from which you transact business.
Travel Deductions – Expenses you incur for business trips relating to your small business can be written off as tax deductions. Such deductions include airfares, hotel costs, rental cars and the likes. The expenses you choose to deduct must be necessary to the operation of your business and must also be practical and reasonable. You are not allowed to write off any personal expenses or trips that are not directly related to your small business operations.
Business Use of Your Vehicle – Small business owners can deduct their car usage when related to business activities and other necessary travels. This does not, however, include your typical commute to and from work or parking fees required at certain locations.
Employee Paid Expenses – As a small business owner, you are able to deduct your employee wages that you paid throughout the year as well as any health benefit contributions you made for your employees. In addition, if you have any other employee expenses that total in excess of 2% of your business’s adjusted gross income, you are able to claim these expenses as well.
Charitable Donations and Contributions – You are allowed to write off any donations or contributions you made as part of your small business tax deductions.However, any charitable donation made must not exceed 50% of your adjusted gross income otherwise you will not be able to write it off.
Professional and Legal Fees – You may deduct any professional or legal fees that you incurred that were directly assessed to your small business. This would include bookkeeping and accounting fees as well. If, for instance, you had a customer who failed to pay their invoices and you had to resort to taking the client to court, you are able to deduct these types of legal fees. However, if you incurred personal legal fees for any reason, these are not deductible.
THE DEDICATED PROFESSIONALS YOU CAN TRUST HERE AT TAX ALTERNATIVES
If you are in need of expert tax advice, the team here at Tax Alternatives is on hand to meet with your every need. Our team of highly skilled and experienced tax specialists is equipped to handle all your tax preparations and filings and are available to assist with all your small business needs. If the challenge of filing your taxes is weighing heavy on you, don’t fret. Look to our certified tax specialists for all your tax preparation and filing needs. We look forward to serving you and to providing you with the highest quality tax services this side of Brentwood!