Tax time for a small business can be a headache! With all of the expenses, deductions and itemizations, knowing what to claim can be a challenge. As a business owner, you want to make sure to catch each and every write off that you can to maximize the tax benefits for you and your business. Some deductions are not readily thought of and often missed when it comes to filing taxes. Check out some of the top tax write offs for businesses below and don’t let a single cent be missed!
- Expenses of Starting Your Business
When going into business, there are numerous costs that can be deducted. These include things such as office supplies, utilities, marketing and so on. These capital expenses can be written off in the amount of up to $5000 the first year you are in business with any amount over that being deducted in the years following.
- Transportation Expenses
Traveling to and from work is something that most do every day. This simple thing can actually be a write off for your small business! Using your personal or company car for business purposes can be deducted for things like mileage and vehicle servicing. Make sure to keep track of your miles driven so that an accurate deduction can be calculated come tax time.
- Bad Debts
Did you know that you can deduct someone not paying you your dues? It’s true! Bad debts can be deducted by small business owners who sell goods when they are bought but not paid for. Businesses that provide services, however, are not afforded this luxury.
- Wining and Dining
When you entertain clients for business purposes, up to 50% of that can be claimed on your taxes. In this instance, it is very important to save your receipts and, if possible, make notations to show what the business dinner or lunch was for and who it was with as this can help when being audited.
- Business Travel
If you have to travel for a business meeting or to visit a client further away, these costs are able to be claimed by small business owners and other individuals within your company. Both the mileage and the costs of food and lodging are things that can be written off as business expenses and can help to lessen the load of your tax payments.
As the sole proprietor of your small business, tax time doesn’t have to be stressful. There are many deductions and write offs that you can take from things that you do every day on the job. Make sure to keep track of each business related expense and when it comes time to sit down with your accountant, you can relax and enjoy the ride!