Written by the OneBooks Team
Tax season is something that most people would rather avoid altogether, considering the number of business deductions for taxes and the forms and calculations necessary to complete the task. For owners of small businesses, the process can be even more stressful. Understandably, this would be far from a popular subject, but there are essential things all small business owners should know when it comes to filing their taxes to net them the most benefits, which is why it’s always great to consult with a Quickbooks ProAdvisor. One of those things is deductions for business expenses. Many are familiar with some of the more basic deductions a person can claim, but many of those specific to small business owners are often forgotten.
The Most Overlooked Tax Deductions for Small Businesses
1. Startup and Organizational Costs
Many funds go into creating and launching your business, and many of them, including startup expenses, can be claimed as business deductions for your taxes. You can also deduct the fees required to establish your business as a legal entity and register it with the state. Other related deductions include certain taxes, loan fees, and interest, and bad debt write-offs.
2. Regular Operational Expenses
After a business has been successfully established, a multitude of regular expenses must be met to continue operating as usual. These include rent payments, utility bills, and various office supplies. In some instances, you can even offset your tax liability by reporting your equipment expenses as well. To ensure this is done correctly it’s always beneficial to consult with a Quickbooks ProAdvisor who can guide you through the process.
3. Home Office Expenses
Depending on your situation, you may be using a portion of your home exclusively to conduct business. If that is the case, then you can deduct certain home office expenses as well. This could include phone and internet bills, utility bills, maintenance costs, property taxes, and more.
4. Marketing Expenses
To grow your business, it’s crucial to invest in a marketing strategy. This often involves all sorts of expenses, such as web development services, ad space, print materials, and marketing specialists. These expenses can all be deducted.
5. Employee Expenses
When you hire a new employee, there are many expenses involved beyond a simple paycheck. In addition to paying the agreed-upon wages, you’ll also have to spend money on workers’ compensation insurance, training costs, payroll taxes, retirement plan contributions, and health insurance. Fortunately, these can offer you substantial deductions for your business.
6. Travel Expenses
The laws regarding whether you can deduct expenses related to travel and entertainment are somewhat strict; however, under the right circumstances, these can be write-offs as well. Everyday travel expenses you can deduct include the cost of transportation to your destination, lodging expenses, and meals. To qualify, everything must be very thoroughly documented.
Stop Overpaying Your Taxes With One Books
These business deductions can make a huge difference in your tax liability. However, the IRS is often very strict regarding what forms are necessary to claim each type of deduction, and what sort of documentation you might need to prove said claims. Working with a Quickbooks Bookkeeping professional can ensure you maximize your benefits while preventing you from making costly bookkeeping errors with the IRS. At One Books, our team of dedicated bookkeepers is ready to help you navigate this complex issue with ease.