Owning a small business while being taxed can be tough, especially when you’re trying hard to maximize your profits to save up. While some are already getting the hang of running their businesses well, others are still trying hard to figure out ways to strategically increase their income. However, to solve this, one should not only know but also be aware of the common small business tax deductions to be able to utilize them.
Here is a list of tax deductions for small businesses you should know:
- Simplified Home Office Deduction
This method is about using your home or a portion of your home as an office exclusively for business purposes. Though using this can be complex, you always have to keep records of the expenses of our home to complete the special IRS form, Form 8829.
- Business Use of Vehicle
Using your car exclusively for business purposes can help you deduct the cost of operation and ownership. And there are two methods you can use. These are the standard mileage rates and the actual expense methods. The good thing about this is that you can qualify to use these two methods, and it will be up to you to figure out how they can give you a bigger tax deduction.
- Wages and Benefits of Employees
Offering benefits, such as retirement savings plans and health insurance, to your employees while operating a small business can decrease turnover and increase retention. In this way, any benefit-related costs are deductible upon filing your business taxes.
- Expenses in Business Travels
Business-related travel can help you deduct your expenses, such as transportation costs, lodgings, and airfare. You only need to keep detailed records of the travel expenses, which should only be business-related and not your personal expenses.
- Supplies and Equipment in Office
Materials and office supplies, such as paper, pens, printers, and computers, used in the business are 100% deductible. You just need to file all of the receipts for documentation to be qualified.
- Marketing and Business Advertising
Tax law allows you to deduct advertising and marketing expenses that help bring in customers. This is deductible on your small business tax return.
- Professional Fees
Professional fees paid for accounting services in Kearny, NJ, by lawyers and consultants who are helping you run your business are generally deductible.
- Business Insurance
The cost of your business insurance is deductible on your tax return. If you are using your home as an office, the renter’s insurance costs are deductible.
- Depreciation Expense
Long-term assets that were purchased and used in your business, such as equipment and machinery, are deductible. Consult an accountant to learn more about Section 179 depreciation, which can help you save millions in taxes.
Furthermore, to be able to know more about how tax deductions work, you can consult our most trusted certified public accountant, Nicholas J. Coco, and avail of our accounting services in Kearny, NJ, relevant to your business. You can call us at 201-955-3100. Or you may message us your inquiries at firstname.lastname@example.org. You may also visit our office at 752 Kearny Ave. Kearny, New Jersey.