When it’s time to file your taxes, you’ll want to quickly handle the easiest deductions to ensure your business is getting the best return possible. Even though we’re several months from tax season, it’s important to keep deductions in mind so you can track your receipts year-round and be ready to go when the new year arrives.
If these deductions haven’t been on your radar, it’s not too late to get started. Learn more below about some of the most common business tax deductions you might be forgetting to claim.
Electronics, software and office supplies
Generally, if you need it to do business, you can write it off. Laptops, tablets, phones, cameras and other equipment are fair game if you use them to perform your job. Some items, like computers kept in the office, might be used 100 percent of the time for work and are therefore fully deductible (assuming you can prove their dedicated use). If you use your phone for both business and personal purposes, you may only want to claim 50 percent.
Internet and phone service
In addition to writing off the hardware, you can also claim deductions for the service required to operate your devices. It’s virtually impossibly to operate a business without Internet in any capacity, so you should definitely be writing this one off, even if you’re using your home Internet. If you have a dedicated home phone line and business line, you can write off 100 percent of your business phone service.
Travel expenses
If doing your job sometimes requires airfare, hotels, taxis, parking, trains, etc., you should be claiming these expenses. Traveling for business could include meeting with a client, meeting with a vendor, checking on your rental property or convening an annual board or member meeting. Remember to save your receipts and document how much time on the trip was spent actually performing business.
Dining and entertaining
The recently implemented Tax Cuts and Jobs Act of 2017 made it so food expenses are now only 50 percent deductible in most cases. The argument is that everyone needs to eat anyway, so for any meals you eat while out on the road or that you’re eating lunch with a client you can only claim 50 percent. However, if you host an information night for prospective clients and provide them with refreshments, that expense is 100 percent tax deductible. While the weekly morning bagel routine is only 50 percent deductible, special events like training or holiday party are fully deductible.
With any deductions, always save receipts or make copy/take a photograph and properly document your expenses. Take clear notes about why an item is a business expense and document how much you use it for work in case of an audit.
Are you already tracking your expenses for deductions, or do you tend to skip these deductions? Either way, MCG Solutions can help you save more money at tax time. Contact us today to get started.