Opening and running your own business requires a lot of investment—both in time and in money. In addition, you face new challenges you might not have known as an employee—such as dealing with a more complicated tax situation. Fortunately, with this added stress comes the possibility of earning some money back by claiming eligible deductions. Some of the most useful of these are explored below.
Which Tax Deductions Should I Know About as a Small Business Owner?
1. Business Supplies
Employers need to supply their staff with a wide variety of tools to successfully do their jobs—everything from computers to sticky notes and ballpoint pens. Most of these can be claimed as a deduction, so long as you keep the receipts. Business postage is another potential write-off.
2. Vehicle Expenses
The IRS offers a standard mileage rate of 58 cents per miles driven when a vehicle is used for business purposes. If you believe your costs were higher, be ready to supply proof in the form of receipts or invoices for repair and maintenance costs.
3. Insurance Costs
Insurance protection is a legal necessity for business owners in order to protect the interests of employees who may be injured on the job and to cover the costs of potential accidents. Fortunately, the IRS allows owners to deduct these expenses.
4. Travel Expenses
While local commutes are not deductible, any out of town trips for business purposes can usually be written off. This includes the cost of your plane ticket and rental car, as well as any money spent on hotels.
5. Business Lunches & Dinner
Meals for clients or associates are often deductible. However, you must be aware of the limitations. For example, you may only be able to deduct 50% of the meal costs in many cases. Also, the meal must be held to discuss some aspect of your business. That means a friendly meal with a partner or client might not be eligible.
Making sense of business taxes is no easy feat for entrepreneurs. In Brownfield, TX, Donna Sellers, CPA offers reliable accounting assistance that may help you save money when tax time rolls around. With a focus on small business accounting, this CPA brings more than two decades of experience to the table. She can also lend a hand with payroll service and bookkeeping. Learn more about these offerings on the website. You can also call (806) 637-8556 to schedule a consultation today.