Stop Leaving Money on the Table: Are You Missing Out on These Business Deductions?
Paying more than you actually owe on taxes is downright dumb, but far too many businesses leave money on the table every year. Time to stop letting Uncle Sam reap the benefits of your hard work and start claiming every legit tax deduction, without losing your sanity.
What is a Deduction?
Basically, a business tax deduction is an expense you can subtract from your business income to lower the amount of taxes owed. Think of it as a tax coupon – when you spend money on things that help run the business (wages, rent, supplies, etc.), you can reduce your tax bill.
It’s important to know what a legit deduction is, since the last thing you want is the IRS coming after you for tax fraud. Let’s take a closer look at what you can write off without landing yourself in IRS hell.
Supplies and Services
Every business needs supplies and services and they’re all deductible as business expenses! For example, if your computer took a crap and died, you need a new one for the business. That’s a fully deductible expense.
Do you pay monthly (or annually) for online software for your business? Guess what? Also a legit tax deduction. If you’re using it for work, it counts.
Your Ride, Your Write-Off
Your personal vehicle isn’t a business deduction . . . or is it? Even if your car isn’t specifically for the business, you can deduct things you use it for, like driving to meet a client or picking up supplies for the company. The IRS even has a standard mileage rate (67 cents per mile in 2024) so you can calculate how much to deduct.
Keep careful records and track how many miles you drive for work. When tax season rolls around, you just multiply the miles by the standard rate and bam, you have your write-off. Oh, and don’t forget to count parking fees and tolls in that amount.
Deduct the Overhead
No one wants to deal with overhead costs, but hey, at least they count as tax deductions, right? Everything from office space rent and phone services to utilities can be written off on your taxes.
Feeling down because you work at home and have no overhead? That’s where you’re wrong. If you have a dedicated home office space, you can deduct based on the percentage of your home used just for business. That also means if you’re using your entire garage as a warehouse for products, you can write off that percentage, too.
Other Business Deductions
We’d be here all day if we covered everything that can be written off, but you can include the following in those deductions:
· Travel expenses
· Employee salaries and benefits
· Contractor fees
· Legal fees
· Insurance premiums
· Education and training or certification
· Business loan interest payments
· Inventory costs
· Repairs and maintenance
· Business licenses
Of course, if you’re not absolutely sure what you’re doing, it’s best to hire a professional to handle your business taxes, like your girl, Anna! Guess what? Paying those tax professional fees is also a write-off!
