Best Tax Deductions For Small Business Owners

Life can get expensive. You have personal expenses, business expenses, and to top it off, you have to pay dreadful taxes every year. It all adds up quick. Being legitimately aggressive with your tax write-offs can help with the bleeding.

I am obviously not an accountant however after doing some research I found a pretty good list of legitimate tax write-offs for small business owners.

The IRS of course, doesn’t provide us with a cheat sheet. What they do acknowledge is the tax principle set forth in Code Section 62 that states ‘a valid write-off is any expense incurred in the production of income. Each deduction then has its own rules.‘

If your CPA is good he/she should be looking at everything above your Gross Income line. They should be helping you go over all your expenses from the previous year and analyze what expenditures were for business purposes and which were not. Even some personal expenses may qualify as a business expense as long as the purpose behind the expense was related to your business.

As a business owner it definitely helps to religiously track all of your expenses and to think of your purchases from a tax write-off standpoint. A great app that I would recommend and one that I use daily to track all of my expenses is Cash Trails.

Check out this list I’ve compiled of possible tax deductions for small business owners. Some may not apply specifically to you or your business and some may require some extra legwork to correctly qualify. The last thing you want is an audit so try and play by the rules as much as possible.

I cannot stress the importance of tracking all of your business expenses, and even your personal ones for that matter. Knowing where, and having awareness of how much you are spending and allocating your hard-earned money is not only smart business but it helps you stay sane and solvent. A few quick tips: keep receipts, document meetings and lunches with clients/customers, track your mileage on your car, keep track of what you spend in gas.

Some Possible Tax Deductions For Small Business Owners

Accounting fees
Advertising
Amortization
Auto expenses
Bad debts that you cannot collect
Banking fees
Board meetings
Building repairs and maintenance
Business association membership dues
Business travel
Cafeteria health-insurance plan (requires plan)
Charitable deductions made for a business purpose
Cleaning/janitorial services
Collection Expenses
Commissions to outside parties
Computers and tech supplies
Consulting fees
Continuing education for yourself to maintain licensing and improve skills
Conventions and trade shows
Costs of goods sold – What is Cost of Goods Sold (COGS) & How To Calculate It
Credit card convenience fees
Depreciation
Dining during business travel
Discounts to customers
Education and training for employees
Employee wages
Entertainment for customers and clients
Equipment
Equipment repairs
Exhibits for publicity
Family members’ wages
Franchise fees
Freight or shipping costs
Furniture or fixtures
Gifts for customers ($25 deduction limit for each)
Group insurance (if qualifying)
Health insurance
Home office
Interest
Internet hosting and services
Investment advice and fees
Legal fees
License fees
Losses due to theft
Management fees
Materials
Maintenance
Medical expenses (with plan)
Mortgage interest on business property
Moving
Newspapers and magazines
Office supplies and expenses
Outside services
Payroll taxes for employees, including Social Security, Medicare taxes and unemployment taxes
Parking and tolls
Pension plans
Postage
Publicity
Prizes for contests
Real estate-related expenses
Rebates on sales
Rent
Research and development
Retirement plans
Royalties
Safe-deposit box
Safe
Software and online services
Storage rental
Subcontractors
Taxes
Telephone
Utilities
Website design
Workers’ compensation insurance