It was Benjamin Franklin who once quipped, “Nothing is certain but death and taxes.” Most adults have heard this famous quote, but small business owners often seem to remember the expression even better than your Average Joe who doesn’t have to mess with business taxes.
Some small business owners don’t know all of their available deductions and sadly fork over tons of cash to Uncle Sam that should have actually stayed in their own pockets. This doesn’t have to be the case, though.
There are actually several small business tax deductions that owners should be aware of.
As a small business owner, it only makes sense that you’d want to know about every tax break possible.
In the following, the top three most-forgotten- and potentially most important- tax deductions people forget will be discussed. After that, some other deductions will also be quickly covered.
Different small businesses will find different deductions to be more important and beneficial, but this list will be a good starting point for just about any small business.
Something many small business owners may forget to deduct is furniture. However, you can actually deduct 100 percent of your furniture costs, according to Fox Business.
Also, you get to pick how, exactly, you want to make the deduction. You can either deduct the entire cost for the year the furniture was purchased, or you can space out the deductions out over seven years to account for depreciation.
There’s no right or wrong option to pick. Some people want all of their deduction at once, while other people anticipate that they’ll need that deduction to help over a longer period of time.
When you’re going from one place to another, it’s oftentimes easy to forget to track your mileage. Do not make this mistake! Keep track of your mileage. This can actually save you quite a bit of money in small business tax deductions.
According to Nolo, a large online law library, for your 2013 taxes, you can deduct 56 cents per mile. For 2014, you can get 56.5 cents for every mile you drive.
Don’t forget, though, that the government loves documentation. So, a simple way to keep track of your mileage is to write it daily in a notebook. Another option would be to write your mileage in a calendar. Either way works. The key is just to remember to track your miles in the first place!
Travel, food, fun, and gifts
According to the IRS’ official website, you can deduct 100 percent of your travel and lodging for business trips.
Interestingly enough, though, you can only deduct half of your food and entertainment costs.
So this means you might as well get a ritzy hotel and a first class plane ticket, but you’ll still want to eat somewhere cheap and not splurge on the entertainment.
Oh, and as for gifts, Uncle Sam will let you deduct 100 percent of gifts, as long as you don’t go over $25 per person.
Just make sure to save all of your receipts and document everything. This is extremely important!
As previously stated, furniture, mileage, and travel, etc., are some of the most common tax deductions that small businesses forget to include.
There are several other deductions out there, though.
Phone bills, office supplies, retirement accounts, software, insurance premiums, home office supplies, and other equipment round out some of the other deductions that most businesses will qualify for.
For an extremely in depth look at every single possible deduction you can take for your small business, you can check out the IRS’ official publication on the matter by clicking here.