It is common knowledge that running a small business can certainly make everything seem a little overwhelming every once in a while. One thing that is sure to be close to the top of this list is the costs involved in running a business, from transportation costs to minor things like office supplies. Luckily, business owners are able to claim these expenses back. This is known as ‘deductions’, which are basically there to reduce your taxable profit. In turn, deductions reduce the amount of taxes that a business owner owes. The 12-mile long Federal tax rules have a long list of these deductions. Alternatively, we have provided a much simpler list below for small business owners to scan through, ensuring the hassle-free guidance and support they need when preparing their records.
Travel – Most of the costs associated with business travel can be deducted. This can include flights, hotels, car rental, and sometimes even meals. Often, the entry fee of meetings and/or trade shows can be deducted, too.
Moving Expenses – Although business owners need to have moved over 50 miles from their old homes for this deduction to apply to them, it is definitely worth claiming if this is the case.
Repairs – It is likely that, at some point, business owners will go through having to repair their equipment, whether it is computers, tills, or printers. The list is endless. But, if an item breaks and needs fixing, make sure to deduct these costs.
Utilities – Utilities include things like phone and internet service. The costs of running these, and the office as a whole, can be deducted.
Garbage – The cost of hiring a janitor to clean up the premises and garbage haul can be deducted. Garbage is always deductible, whether it is inside or outside your business.
Professional Services – Hiring a professional to help prepare tax returns is certainly a wise idea for any business owner, big or small. Why? The cost of preparation and legal fees is deductible, and this move will save you lots of additional stress and hassle that could arise in the future.
Entertainment – When discussing business is part of the equation, the costs of a variety of entertainment can all be deducted. Whether it’s showing a new client around town or meals and drinks during an important meeting, be sure to take notes on the backs of receipts to explain these to the IRS. If you do this, there will be no problems where your deductions are concerned.
Transportation – The fantastic thing about deductions is that all costs of transportation can be reimbursed when driving for business. This includes gas, repairs, oil, insurance, vehicle registration fees, tolls, and parking fees. For those who do not drive, cab fare and bus tickets can be deducted, too.
Postage – For the business owners who prefer to do it the old-fashioned way, the costs of postage can be deducted by the IRS. This includes shipping goods to customers and the cost of a stamp when mailing your return.
Office Supplies – Simple, but significant. The cost of office supplies are greatly underestimated in some businesses, so it’s a good thing that these can be deducted. Whether it’s post-it notes, pens, pencils, erasers or rubber bands, the IRS will gladly reimburse these.
Bank Fees – Nobody likes bank fees, but they can be deducted. Be sure to keep track of any bank fees that occur and deduct the expense, for it will benefit you greatly if you do.