If you have not been staying on top of the constantly changing tax deductions that your business may qualify for, you may be missing out on multiple tax saving benefits.
Whether you’re running a one-person operation or managing a growing team, overlooking even a few eligible deductions can mean paying more in taxes than you should.
One of the most commonly missed deductions is the home office deduction. If you work from home — even just part of the time — you may be able to deduct a portion of your rent or mortgage, utilities and even internet service. The space must be used regularly and exclusively for business, but you don’t need a separate room; a dedicated corner of your living room can qualify. Many small business owners skip this deduction out of fear of doing it wrong, but with proper documentation, it’s a legitimate and valuable write-off.
Another frequently overlooked deduction is mileage and vehicle expenses. If you use your personal vehicle for business purposes, you can deduct either the standard mileage rate or actual expenses like gas, maintenance and insurance. Just make sure you’re keeping a detailed log of your business-related travel, as the IRS expects accurate records.
Startup costs are also commonly missed, especially by newer businesses. If you spent money getting your business off the ground, those expenses can often be deducted in your first year of operation. There are limits, but even partial deductions can make a difference.
Then there’s the meals and entertainment deduction, which has changed in recent years. While most entertainment expenses are no longer deductible, business meals still are up to 50%, and sometimes 100% if purchased from a restaurant for a client meeting or staff gathering. Just make sure to document who you were with and the business purpose of the meal.
Professional services, such as bookkeeping, accounting, legal consultations and even software subscriptions like QuickBooks Online, are fully deductible.
Continuing education, industry certifications and relevant training can also qualify as deductions. Whether it’s a webinar, online course or conference, if it helps you improve or maintain your skills for your business, it may be deductible.
Lastly, health insurance premiums, retirement plan contributions and even part of your self-employment tax may be deductible for business owners. These can be substantial savings, especially if you’re a sole proprietor or run an LLC.
Missing out on these deductions means leaving money on the table.
For more information about small business tax deductions from the experts at AMA Bookkeeping, please contact us here or call us at 740.287.0878.
