If you are a small business owner you may be paying more in taxes than you need to be. All business owners should be aware of the small business tax deductions available to them. This could end up saving you thousands of dollars each year. If you have an accountant they should be able to guide you in the right direction, but you need to make sure you have all of your receipts to give them.
No matter if you work out of your home or you have your own office, that expense is tax deductible. If you have a home office, the area of the room that you work in is the only amount you can deduct. Let’s say for example that your home office is 15% off the total square footage of your house. That means you can deduct 15% off the cost of your rent, mortgage, electricity, insurance, heating, ect.
If you purchase a new office desk, filing cabinet or any other office related furniture you can deduct the cost of this from your taxes. You can do this in one of two ways. The first way is by taking a 100% deduction in year one and the second way is that you can depreciate it over seven years.
All of your pens, printer paper, ink cartridges, ect are items that are tax deductible.
Just like your office furniture you can get a tax write-off for any office equipment you buy such as new computers, printers, scanners, ect. You can either take the full deduction in year one or you can depreciate it out over five years.
If you take any business trips you can write off all of that. You can deduct 100% off your travel and hotel but only 50% of your food.
If you are self employed than you are most likely paying for your own health insurance premiums and that can be a huge expense here in the US. The good news is that they are a 100% small business tax deduction.
If you are self employed there is a good chance you might have signed up for a SEP-IRA. If so all of your IRA contributions are tax deductible.
Car Milage, Parking –
If you have to drive to a business meeting than you can deduct the miles driven in your car at a rate of $0.55 per mile. You can also deduct any parking fees associated with the trip.
While having all of these small business tax deductions is nice you need to be aware that you can only deduct an amount equal to or less than your profits.
Do you know of any other small business tax deductions that you would like to add?