Tax deductions can go a long way in helping you get more out of your get mall business. A lot of business owners might feel hesitant to take full advantage of all the tax deductions they qualify for, but this shouldn’t be the case. As long as your business is doing its part and paying tax, there’s no reason why you shouldn’t take advantage of permissible tax deductions. After all, the extra money you get for your business by deducting certain expenses can be spent on growing your business which, in turn, will mean that you can contribute even more to the economy.
With that in mind, there are a number of things you can (and should) legally deduct from your taxes.
Rent for Your Business Premises
Renting your business premises is probably one of your larger business expenses. For that exact reason, tax deductions on your rent can make a big difference for your business financially. The more expensive the rent on your premises, the bigger the advantage of deducting this expense, so if you have a large business premises with hefty rent, this can help to lighten the load.
It doesn’t matter what kind of business you have either. Shop owners, healthcare practitioners and even automotive businesses can all take advantage of this deduction. The only prerequisite is paying rent on your business premises.
Vehicle Maintenance and Upkeep
Vehicles are another big business expense for a lot of small businesses. By keeping track of all your business expenses related to your company vehicles, you can deduct your vehicle expenses from your tax. Examples of vehicle expenses that can be tax deductible includes money spent on fuel, vehicle maintenance and repairs, parking and even tolls.
If you’re not keen on all the extra admin involved in tracking each individual vehicle expense, you also have the option of using the IRS standard mileage rate, which is currently sitting at 58 cents per mile driven.
Another alternative is to choose whatever option gets you the best tax return. To calculate this, you will have to keep track of all your vehicle expenses, which means it will involve a lot of work, but it might be worth it if your business owns any vehicles that are more expensive to maintain due to higher fuel consumption or more expensive service parts.
Any vehicle used for business purposes can qualify for this deduction, whether it’s a car, truck or even motorcycles. There are some exceptions to motorcycles, thought. For instance, you’re not allowed to use the IRS flat rate for a motorcycle. The only way you can get deductions for a motorcycle, is by keeping track of all your business-related transport expenses.
Almost all businesses have computers. As a result, most small businesses can benefit from deducting computer software. Whether you have an office and you pay an annual expense for your operating system, word editors and slideshow software, or you have a graphics design firm and you run programs to create images, you can deduct your computer software as a small business expense.
To take full advantage of this deduction, look into all the software and even online tools you use for your small business. You might even be able to deduct the fee you pay to your email service provider or money spent on bookkeeping software.
Advertising and Marketing Expenses
Money spent on advertising and marketing is a business expense, often a big one. You’ll be happy to learn that all the money you spend on advertising in tax deductible, which makes sense, as all advertising is related to business.
There are so many different things that you can deduct as a marketing or advertising expense. If you start to add it all up, it will quickly amount to a staggering figure. Here are some of the things you can potentially deduct as marketing expenses:
- Business cards
- Paid advertisements in your local newspaper
- Advertisements on billboards
- Promotional materials and goods
- Your company website expenses
- Online marketing expenses
This means that any marketing expense can be deducted from your tax. Whether you want to make branded keychain holders to hand out at a corporate event, or print promotional pamphlets, these expenses will usually be tax deductible.
If you spend money on any online marketing-related software or services – such as an email newsletter service provider or pay per click advertising – it might also be worth investigating whether you can deduct these expenses. Perhaps you find you’re unable to deduct the expense for your email newsletter as computer software, but you can deduct it as an advertising or marketing expense instead.
If you have an office for your small business, there’s a good chance you spend a lot of money each here on office supplies. Whether you’re buying printer ink, paper or pens. Even coffee, tea, milk and cookies can count if you regularly stock your office with these items for your employees.
No matter what industry you work in, your business will have admin, which means your business can deduct for office supplies. It’s easy to get so lost in deducting for expenses directly related to your industry, that you forget to deduct business expenses related to your admin.
Money spent on postage, shipping and delivery fees might be another hidden deduction you can get, which can help a lot if your business regularly makes use of such services.
Furniture and Equipment
Any equipment you purchase for your business (such as computers or printers) and even furniture can be deducted from your tax. There is, however, a catch here. You have the choice between either a full deduction for these items in the year you purchased them, or to depreciate them over a seven year period.
What you choose will depend on what’s best for your business. If you’re uncertain about which option is better and more applicable to your situation, it’s always best to consult your accountant about the matter.
If you spent money the past year on education for yourself, or any of your employees, you might just be eligible for a tax deduction. Expenses for seminars, workshops, classes and college programs can be seen as a business expense if it’s related to your industry.
To comply with safety regulations, businesses often have to send employees for first aid and safety training. If this is the case for your business, it’s good to know these forms of training will almost always be a tax deductible expense, as it is education related to your business.
The only important rule for deducting education as a business expense is that it has to be related to your business. You can’t deduct education expenses if you undertook it for personal reasons. If, for instance, you went for cooking classes or dog training lessons, you probably won’t be able to deduct this unless it’s related to your industry and it can benefit your business.
Cleaning is part of your business upkeep, so if you hired a professional cleaning company to clean at your business premises, there’s a good chance you can deduct it as a business expense. Regardless of if you hired a company to do mundane cleaning work at your office, or if you made use of a specialized cleaning service, cleaning is a tax deductible expense for your business, as it’s a necessary part of keeping your business premises hygienic and safe.
Some cleaning expenses that you may be able to deduct include:
- Pressure washing your business premises both inside or out
- Regular or high-rise window cleaning services
- Carpet cleaning
- Dry cleaning uniforms
- Everyday cleaning services
Cleaning is an expense your business will incur every year, so adding it to your tax deductions can make a big difference.
Business supplies are one of the more obvious expenses, but it’s important to check all of your expenses in this area to make sure you’re getting all the deductions you can.
If you run a store, for instance, it’s obvious that you can deduct all the stock you bought in the past year as a business expense. At the same time, businesses that provide a service must also remember that all supplies they need to complete their service are business supplies. This could be building materials for a contracting firm, or cleaning supplies for a cleaning company.
However, there may be some hidden supplies that your business could possibly get deductions for. If you buy any cleaning supplies to clean your business premises, or if you buy uniforms, there’s a good chance you’ll be able to deduct these expenses.
Always Consult Your Accountant
To so stay within the legal bounds of tax deductions, it’s always best to get an expert opinion. Hiring an accountant can help you stay current with your taxes and avoid penalties for illicit tax deductions or practices. As an added benefit, the money you spend on financial services for your business (like your accountant) is also tax deductible!