Small Businesses Do Know Your Tax Deductions?

Whoa, 2017 got here fast, and now that the holidays are over it’s really sinking in. Instead of just thinking in terms of a new year meaning a new you, it should also mean a new business. It’s time to grow and prosper more than ever. One simple way to boost your business is to save money where you can, and that can be done by taking advantage of a few small business tax deductions that most people don’t know about.

What Are Deductibles?

Deductibles are what you’re allowed to deduct from taxable income when you’re calculating how much income tax you have due. If used correctly they basically reduce the amount of taxes you owe to the government. Unfortunately, most people don’t know about deductions and write offs they can claim and end up paying more than they have to.

Small Business Deductibles

Meals

You’ve probably heard a business person boasting about writing a meal off at some point in your life because they can. However, in most instances, meals are only covered up to 50% and in some cases, they are actually covered 100%.

When eating out for strictly business reasons like to wine and dine a client keep important records of who you were with, when, why, and where, because the IRS can reject this deductible to prevent people from getting lavish meals every time, and to stop bosses from taking the same coworker out to lunch multiple times a week.

Now, meals are fully covered if they’re to benefit your team. You can provide coffee for your team and the occasional lunch or dinner to say a good job. This is slightly off topic, but you can even give your employees gifts and deduct the costs, up to $25 per person.

Travel

Of course, business trips are deductible. The costs of travel, meals, and lodging are deductible, and in some cases so are the vehicles.

If you use a car, truck, or small van for your business keep track of the mileage, gas, oil changes, parking fees, insurance, and maintenance costs because they can all be deducted.

However, keep in mind that these costs can only be deducted when used for business purposes. Your daily commute isn’t included!

Rent & Utilities

If you have a business you need a place to put it. That’s a fact. Once you place it in an office building, store front, factory, or any other type of facility you can deduct the rent! Also, you can deduct the cost of maintenance and insurance on the space.

Here’s a fun fact, you might even be able to deduct your cost of moving when changing business spaces. Just make sure to properly file the paperwork, and remember that the new location must be at least fifty miles away from the old one.

If you rent any equipment, or if you’re leasing to own any equipment the costs of those items can be deducted as well.

There are basic necessities to keep a business running, right? You know like electricity, water, gas, phones, and internet? They’re very important these days, that’s why they’re deductible. Although, keep in mind that items like phones must be used for business purposes only. Records of who you call will show if you’ve been making personal calls or not.

This isn’t necessarily a utility, but buildings need to be cleaned, and workplaces need to be sanitary, which is why cleaning products that your cleaning staff uses can be counted as deductibles.