If you are smart with your tax planning strategies, you will be able to save your small business a significant amount of money each year. Part of this is finding all of the deductions for which your business qualifies so you can maximize your savings.
Most small business owners are aware of the deductions that exist for things such as travel costs, home office costs, healthcare premiums and startup expenses. Beyond these major categories, however, there are some other deductions that are often overlooked by owners of small businesses.
Here are a few examples of these lesser-known tax deductions that your business can benefit from:
- Certain types of travel costs: Most people are aware they can deduct driving expenses with the standard mileage rate, or flight costs for business travel. However, other expenses associated with your travel are also tax deductible, including lodging, food, costs of entertaining business guests and colleagues and more. Just remember you are only able to deduct portions for yourself, and not your family members, when on business trips.
- Business equipment: Section 179 of the IRS code allows you to deduct thousands of dollars for business equipment purchases. So if you recently bought new computers, a new vehicle, phones for your employees or any other expensive equipment, you can benefit from some savings come tax season.
- Relocation: If your business must relocate, you can deduct moving costs on your taxes, so long as the new business location is at least 50 miles farther from your previous home than its previous location was.
- Training and education: Any costs associated with training or education gained specifically to sharpen your business-related skills are tax deductible. This includes training sessions, seminars, conferences, coursework and other similar educational outlets.
- Interest: If you have taken out any loans for your business or use a credit card for purchasing business items, the interest you rack up is tax deductible.
- Consulting fees: If you paid an attorney, marketer, social media manager, accountant or other professional to provide assistance in growing your business or managing certain aspects of your business, those fees qualify as tax deductions.
- Furniture: It’s not just technology and machinery that qualifies for tax deductions—new furniture such as desks, chairs, couches and other office furniture can be written off as small business expenses. You have the option to either write off the full amount or use the seven-year depreciation write-off method.
- Phone use: If you use a phone for business purposes, you can write off some of your phone expenses based on the amount of time spent on your phone specifically for business reasons. If, for example, you pay $70 a month for your phone and about half the time you use it for business, you would be able to claim $35 a month for 12 months, or $420.
For more information about the various tax deductions available for your small business, contact us today at MCG Solutions. We look forward to being your guide during the upcoming tax season.