Once again, as tax time approaches, small businesses are likely searching for ways to maximize tax deductions. Business Insider states there are approximately 28 million small businesses in the United States, more than half of the population works for small businesses, and since 1995, small businesses have been responsible for creating 65% of new jobs.
Small businesses are fundamentally important to this nation. For all businesses, staying afloat can be difficult, especially in in a challenging economy. Reducing taxable income can be beneficial. Included here are a few items that could be eligible for tax deductions. These items are intended to be basic and brief itemized guide. You should follow up with your tax professional regarding all of your deductions.
There could be a silver lining to fees associated with overdue bills. Small businesses can write off bank fees and any interest paid on past due bills, credit cards, and loans. Legal and professional fees are also eligible for deductions. State sales tax is also deductible.
Small businesses can deduct funds donated to eligible 501(c)(3) charities, with supporting documentation. Client gifts up to $25 are also eligible.
Start Up Costs
543,000 new businesses open each month. Many of the costs associated with starting a business can be deducted, and surprisingly, many small business owners do not include these expenses.
If you operate your business out of your home, you could be eligible for a simplified home office deduction of $5 per square foot. There are limitations on the total deduction and space, so check with your accountant or tax professional.
Costs associated with advertising could be eligible for deductions.
Expenses associated with leasing a property qualify for tax deductions, as long as “the rent is for property you use in your trade or business,” according to the IRS. Additionally, the IRS states: “If you have or will receive equity in or title to the property, the rent is not deductible.”
Furniture and equipment are eligible for deductions. Business books and software are tax deductible.
If you use your car for business related travel, you can deduct all of your actual documented professional expenses or you can choose to be reimbursed 56 cents per mile for business travel.
The United States Internal Revenue Service has a web page dedicated to deducting business expenses, which can provide further assistance. The United States Small Business Administration has a web page with full of all types of information about filing and paying taxes.
Identifying small business tax deductions should be done in conjunction with a qualified tax professional. The IRS has an instructional video and the SBA has a very helpful article regarding the selection of the best tax professional for your small business.
4 Tax Deductions Small Businesses Often Overlook. Retrieved from: http://www.businessnewsdaily.com/5919-4-tax-deductions-you-might-forget-about.html
15 Small Business Tax Deductions. Retrieved from: http://www.entrepreneur.com/article/205334
Choosing a Tax Preparer for Your Small Business. Retrieved from: http://www.irsvideos.gov/SmallBusinessTaxpayer/Resources/ChoosingTaxPreparerForSmallBusiness
Deducting Business Expenses. Retrieved from: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses
Don’t Overpay Your Taxes. Retrieved from: http://www.entrepreneur.com/article/231128
Filing and Paying Taxes. Retrieved from: http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/establishing-business/taxes
How to Choose a Tax Professional for Your Small Business. Retrieved from: http://www.sba.gov/community/blogs/community-blogs/small-business-matters/how-choose-tax-professional-your-small-busine
How Small Businesses Can Get Tax Deductions for Charitable Giving. Retrieved from: http://www.sba.gov/community/blogs/how-small-businesses-can-get-tax-deductions-charitable-giving
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Top Tax Deductions for Your Small Business. Retrieved from: http://www.nolo.com/legal-encyclopedia/top-tax-deductions-small-business-30176.html