Taxes can be the single largest expense for businesses and business owners. One of the most significant benefits of being a small business owner is the tax deductions that are available. The more tax deductions that you have at the end of the year, the less you owe in taxes…..plus you could even walk away with a few extra benefits. However, many small business owners are not aware of important tax deductions that could greatly benefit them. Meals, travel, computer equipment and cell phones, may all be tax deductions. The same goes for that nice car you may have been wanting. Here is a list of 7 Tax Deductions for Small Businesses.
1. Automobile Expenses – Your business can own its own automobile or if you use your car for business you can deduct some of costs associated with driving. Basically, you have two choices:
• The Actual Expense Method would require you to keep a log and track all of business related expenses.
• If the other option is the Standard Mileage Rate Method. Each year there is a standard mileage rate given. In 2016 the IRS standard mileage rate is 54 Cents per mile. To take the standard mileage rate deductions you simply track and calculate the numbers of miles you use for your business.
Surprisingly, many people do not deduct their auto expenses and it is a great way to save money!
2. Technology and Office Supplies – We all know that technology plays important part in today’s business environment. It seems that small business owners are always buying new computers, scanners, phone systems, and countless other items that are part of running a productive business. Many people are not aware, but most of these materials can be fully expensed. Just keep an account of all of the items and discuss with your CPA or tax advisor any items that might be used for personal use as well.
3. Mobile Phones – Just a few weeks back I upgraded phones and got a wonderful new phone on our business account. Cell phones are used all of the time to do business all over the world nowadays. Plus, the IRS issued a new ruling that business owners can write off 100% of their cell phone costs as long as they have an established home phone line.
4. Meals and Entertainment – This is another one that is that is not used as often as it should! Any meal or coffee taken with for business purposes can be written off. What if you do not have the receipt? Relax, if it is under $75 you usually do not need a receipt. Plus, it is easy to keep track of records from bank accounts and credit cards bills for write offs as well.
5. Charitable Contributions - If your business is a LLC, a Partnership, or an S Corporation you can make charitable contribution to the charity of your choice and simply pass it on to you and claim it on your individual return.
6. Advertising and Marketing Costs – Ordinary advertising and promotion of your business is deductible as a current expense. Think business cards, yellow page ads, or sponsoring that little league game.
7. Business/Leisure Travel Trips – This happens to be one of the most underused deductions for business owners. This is strange because travel expenses are 100% deductible, while other items like the usual entertainment expenses and meals are only 50% deductible. Yes, this includes hotel, airfare, train costs, rental cars, taxis…….
8. Meals and Entertainment – This is another one that is that is not used as often as it should! Any meal or coffee taken with for business purposes can be written off. What if you do not have the receipt? Relax, if it is under $75 you usually do not need a receipt. Plus, it is easy to keep track of records from bank accounts and credit cards bills for write offs as well.
Our job at Las Vegas Bookkeeping to assist you in the success of your business and to save you money. Tax savings is one of the biggest opportunities for business owners to improve the bottom line of their business. Contact us at firstname.lastname@example.org for a free consultation.