There are several types of tax deductions that small business owners can use to save money. Unfortunately, many people are unaware of these deductions and typically end up paying more. As a small business owner, are you aware of all the tax deductions you can use to lower your taxable income and save money?
Here are some tax deductions you might not be aware exist:
Typically, new businesses incur large costs before they are even able to fully operate. These costs are referred to as start-up costs. You are eligible to deduct up to $5,000 of your start-up costs in the year your business begins. These costs vary by business type and industry. However, some common expenses to consider are insurance, equipment, permits, and employee training.
Car and Truck Expenses
Do you use a vehicle such as a van, truck, or car for your business? You are able to deduct the operating costs of that vehicle. You must, however, be able to prove that the vehicle was used for business purposes. In order to be able to provide evidence in case needed, be sure you keep a dated record of how many miles you drove for business purposes.
If you run your business out of a proper home office, you could be eligible for a home office tax deduction. In order to qualify for this deduction. part of your home must be used exclusively for business. Your home office must be used on a regular basis, using it only a few times a month disqualifies you from this deduction. It is also common to have the IRS visit your home to investigate whether the use tests are met. In addition, you may be eligible to deduct expenses such as utilities, rent, or property taxes, but there are some requirements you must meet. For the latest most up-to-date information we suggest visiting the IRS website.
The IRS allows you to deduct several types of expenses related to sales and marketing. Money spent on advertising, email marketing, public relations, and printed marketing material qualifies for a tax deduction. These expenses are related to helping you bring in new customers and retain existing customers. On the other hand, there are certain marketing expenses you are unable to deduct, such as expenses associated with research and development activities, cars with advertisements, or advertising on websites used by or for a political party.
Tax rules undergo constant change. This tax season, check the IRS guidelines for small business tax deductions before you file your taxes for the latest information and you might even save more.
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