Tax preparation in Kearny, NJ, or wherever part of the world you are in, is inevitable at least once a year. This is the time of year when you have to be prepared and ready for all your tax obligations. If you do not want to face any obstacles while settling all your tax obligations, being well-prepared and informed is the best answer.
If you want to be more accurate with all the documents and steps you should accomplish, like knowing all the common deductions applicable to individuals and businesses, seeking help from a certified public accountant (CPA) is the perfect and wisest decision you will make.
Common Deductions for Individuals and Businesses You Should Know
Here are the common deductions applicable to individuals and businesses you should take note of.
1. Bank Fees
Companies and businesses with separate bank accounts and credit cards that charge annual or monthly service charges, transfer fees, or overdraft fees are eligible for tax deductions. Business owners can also deduct merchant or transaction fees paid to a third-party payment processor. Examples of these third-party processors are PayPal and Stripe.
Take note that deductions are only applicable to the separate bank accounts and credit cards of your business. You cannot deduct fees related to your personal bank accounts and credit cards.
2. Home Office
Business owners, self-employed freelancers, and independent contractors who use a home office for their business are allowed by the IRS to deduct certain expenses that go into furnishing and maintaining their home office. They are allowed to deduct a certain amount depending on the size of the home office in square footage. But remember that the space must be exclusively used for business purposes.
When you choose to be on your own and be self-employed you have to be your own boss. But it is not fun to pay extra taxes to work on your own and be your boss. Gratefully, the self-employment tax will cost you less than you think. This is because you can deduct 50% of your self-employment tax from your net income when calculating your income tax.
If you want to learn more about and avail yourself of self-employment deductions, it would be a wise decision to hire a certified public accountant (CPA) who can provide you with professional and reliable tax consultations in Kearny, NJ.
4. Business Insurance
Depending on what state you are in, the majority of businesses are required to carry a few forms of business insurance. Examples of these insurances are worker’s compensation insurance, general liability insurance, and professional liability insurance. These insurance forms are needed for your business’s operations. Additionally, they can be deducted from your taxable income.
5. Health Insurance Premiums
A self-employed individual who pays for his/her health insurance premiums and is not eligible to participate in a plan through her/his spouse’s employer is allowed to deduct all his/her health, dental, and qualified long-term care (LTC) insurance premiums. Moreover, you can also deduct the premiums you paid to provide coverage for your spouse and your dependents.
These are some of the tax deductions you can avail of for your business and yourself. If you want to know more about these tax deductions, do not hesitate to seek help from a professional, certified, experienced, knowledgeable, and reliable certified public accountant like Nicholas J. Coco, CPA. Rest assured that we are qualified to provide you with the tax consultations in Kearny, NJ, that you need for your business and yourself.
Call us today at 201-955-3100 for your questions and concerns, as well as if you want to avail of our top-notch and trusted services.