The tax season can be a stressful time. If you own your own company, you’ve probably been dreading the paperwork and how much it costs to do your taxes. However, there are some write-offs that may help reduce the amount of money you owe. These are write-offs that many forget about but should consider especially if they’re small businesses.
You may have probably heard of the standard deductions that come with owning a business, including expenses for advertising or office supplies, but did you know that there are additional deductions available to those who have their own businesses? Here are some other expenses that might help bring down the cost of doing your taxes this year.
If you’re a traveling business owner, there’s a good chance that you can deduct your travel expenses. You might be eligible for deductions on anything from airfare to ground transportation to lodging. As long as you don’t receive any reimbursements from your company, these expenses can be deducted as a business expense.
Home office deduction
If your home is also your place of business, you may be able to deduct the percentage of your house that’s dedicated to your office. For example, if half of your living room can be classified as an office space, then half the cost of the living room would be deductible. You’ll need to determine which rooms are used exclusively for work and what percentage of those rooms are used for business (50% in this case).
If you use your car solely for business purposes, you can deduct what you would normally pay for gas, repairs, insurance and any parking fees.
If you’ve recently started your own business, there are expenses that can be deducted. If you have to purchase office furniture or computer systems for the company, those costs can be deducted. For example, if you just purchased a new laptop for work purposes that cost $500, then that $500 is deductible.
Qualified business income deduction
The qualified business income deduction is a new deduction available to small-business owners. The deduction reduces the amount of taxable income by 20 percent, or up to $250,000 for married couples filing jointly ($125,000 for single taxpayers). It applies to qualified business income from sole proprietorships, S corporations, partnerships and LLCs. The qualified business income deduction can be used in addition to the standard deductions that are allowed for most taxpayers.
Millions of dollars are left on the table and paid back to the IRS due to tax payers not taking advantage of these deductions which should be claimed. If you are a business owner, and haven’t taken full advantage of the deductions (there are lots more) , most-likely, you are overpaying on taxes and should consider re-evaluating your tax return for missed savings.
Our team at 4sight Advisors LLC is equipped to help you navigate the nuances of the tax code and
maximize your benefits. We would like to give you a free 45-minute consultation to discuss how you can
earn more using our proven strategies.