Here are some small business tax deduction items that will help sole proprietors or starting entrepreneurs turn operating expenses into tax savings.
9 Small Business Tax Deduction Items to Remember
Small Business Tax Deduction #1: Accounting and Bookkeeping Expenses
Even though some businesses are small, they will still need help with their financial books. This help may either come via a hired professional or a purchased software. In any case, payment for accounting and bookkeeping services is in our tax-deductible expenses list.
Small Business Tax Deduction #2: Legal and Other Professional Expenses
Running a small business may be less complicated compared to operating big corporations. However, this doesn’t mean that small businesses can handle all matters by themselves. They will still need the help of lawyers, business consultants, appraisers, and other professionals. Luckily, tax business write-offs cover payments for these services.
Small Business Tax Deduction #3: Office Supplies and Materials
Small businesses will need to invest in quality office supplies and materials. And as the business grows, the number of supplies and materials also have to increase. This can be a problem especially for those who have yet to earn enough profit. It’s good that tax breaks for small businesses include the cost of buying office supplies and materials.
Small Business Tax Deduction #4: Computer Hardware and Software
Almost everything now comes automated, including business processes. For small businesses, purchasing computers will help them keep up with the demands of their operations. They may invest in good computer hardware and software because it falls under the tax-deductible expenses list.
Small Business Tax Deduction #5: Insurance Expenses
In businesses, nothing is ever safe and sure. There can be instances like office building damage or equipment loss due to a burglary or fire. These unfortunate events are unavoidable and may occur at any time. Small businesses need not worry about the costs of buying insurances since this falls under the tax business write-offs.
Small Business Tax Deduction #6: Vehicle Use
Part of the business operation includes being on the road. This either means the delivery of goods to clients or business trips to attend various meetings. The purchase and maintenance of business vehicles, though, may be expensive for small businesses. Also, there are other expenditures to consider such as gasoline, parking fees, and toll fees. Luckily, all expenses related to business use of a vehicle are among the tax breaks for small businesses.
Small Business Tax Deduction #7: Advertising and Marketing Expenses
Any form of promotion will help small businesses reach out to more potential clients and grow into a bigger and more successful company. Promotions may be as simple as printing and distributing flyers and posters, conventional as newspaper and TV advertisements, or advanced as digital and online marketing. In any case, owners of small businesses may deduct all advertising and marketing-related expenses from their tax dues.
Small Business Tax Deduction #8: Business Travel and Entertainment Expenses
As per the mantra of all businesses, the customer is always right. Plus, the clients provide businesses the revenues needed to maintain their operations. The need to take care of clients is important to business owners. That’s why business people pamper and treat their clients to a night on the town or send them gifts and freebies at the company’s expense. Small businesses don’t have to worry about these expenses because these are deductible from their business taxes.
Small Business Tax Deduction #9: Interest in Business Debts
In some instances, most small businesses have to get loans from banks to either expand their operations or cover up some expenses. And usually, this incurs interests that may add up to business expenses. Good thing that interest payments fall under the tax breaks for small businesses.
Sole proprietors or starting entrepreneurs should remember these small business tax deduction items. These tax breaks for small businesses will help them save some money and allot funds in improving their businesses.
Are there other small business tax deduction items you wish to include in our list? Share with us your ideas in the comments section below.