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Tax return preparation can be a stressful process for entrepreneurs; however, one of the highlights is claiming tax deductions for your business, because they allow you to write off your company’s expenses. If you’re wondering what types of deductions you can claim, below are a few of the most common ones.

What Tax Deductions Do Small Businesses Typically Claim? 

1. Rent & Utilities

Whether you operate from a home office, retail store, or warehouse, you can deduct the cost of rent from your taxes. If you have a home office, calculate the percentage of your home used for business to determine how much rent can be claimed. Utilities, such as electricity, internet, and phone, can be deducted as well. 

2. Vehicle

tax return preparationDo you use your car for business? Whether you’re driving to clients or traveling for business, you can deduct certain vehicle-related expenses during your tax return preparation. These typically include gasoline, auto repairs, tolls, and parking fees. Keep receipts of all of these costs.

3. Qualified Business Income

Introduced in the Tax Cuts and Job Act of 2017, this provision allows small business owners to deduct 20% off their taxable or qualified business income. However, this deduction does exclude certain types of businesses; for instance, engineers and architects cannot claim. Your income must also be below a specific threshold to qualify. 

 

If you’re looking to hire an accountant to manage your business finances, turn to the team at Balanced Bookkeeping & Tax Services in Lincoln, NE. This premier accounting firm offers a variety of financial services for both individual and business clients. From payroll services to tax return preparation, you can count on these professionals for exceptional service and personalized advice. Give them a call today at (402) 466-4272 to schedule an appointment for tax return preparation, or visit their website to learn more about their list of services. 

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