Tax Deductions for Small Business Owners

Tax day is fast approaching and how many of you still have to do your taxes? I figured it was most of you. Ha!

Here are some deductions that you won’t want to forget. If you have questions, please ask your CPA, accountant or tax preparer as they are better able to help you maximize your deductions for the year.

• Home Office – You are able to write off the amount of space you use for your home office and only that amount of square feet. Measure your home office and then divide that number by the total square footage of your home. If your office is 100 square feet and you have an 1800 square foot home, then the fraction would be roughly 5.5% of your home is being used for your home office. So, you are able to write-off 5.5% of your mortgage payments, homeowners taxes, electricity, homeowners insurance and possibly other bills as well.

• Office Supplies – Keep receipts of everything you buy for your office.

• Office Furniture – You can deduct 100% of your office furniture cost or depreciate it over a number of years.

• Office Equipment – You can claim computers, faxes, copiers, scanners, telephones and other equipment that you use in your home office. Office equipment is similar to furniture where you can either deduct 100% up front or depreciate it over time.

• Computer Software and Protection – You can deduct computer software and programs that you’ve purchased for your business along with antivirus and other protection on your items.

• Mileage – If you drive for your business, you can deduct either mileage OR auto expenses such as gas, auto repairs and insurance. You’ll want to keep a log of all of your trips and the purpose of those including any parking costs associated with those trips.

• Travel, Meals & Entertainment – Work travel via air, auto or train is all 100% deductible as is your hotel. You are also able to deduct dry cleaning, rental cars and tipping the bellboy. Food and entertainment while traveling for work is only 50% deductible.

• Gifts – Client gifts are deductible up to $25 per year per person.

• Insurance Premiums – If you are self-employed, you can deduct 100% of your health insurance premiums and your business insurance premium.

• Retirement Contributions – You can deduct your contribution to a SEP IRA and Keough if you are self-employed.

• Telephone Charges – You can deduct your business phone and a portion of your cell phone on your taxes. If you only have a cell phone but use it for business and personal you’ll only be able to deduct a portion of the bill.

• Employees or 1099 Contract Services – Don’t forget to deduct for the people you are paying to help you grow your business. Another great reason to hire a virtual assistant!

For more information on small business deductions please check out or contact a tax professional.

I hope this at least triggered a few ideas on some things that you can deduct this year to help out a bit on taxes. One of my favorite things to do is to help you make (keep) more money!

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