Maximizing Small Business Tax Deductions
As a small business owner, it’s crucial to leverage every tax deduction and credit legally available. This isn’t just smart accounting – it directly boosts your bottom line earnings. By fully utilizing the most common and easy-to-claim small business tax deductions each year, entrepreneurs can save hundreds or thousands come tax season.
Vehicle & Mileage Expense Deductions If you use a personal vehicle for business purposes like client meetings, delivery, events etc – you can deduct associated costs:
- Standard mileage deduction – $0.59 per mile up to 2022
- Actual vehicle expenses like gas, tolls, maintenance and lease payments
Equipment & Asset Deductions
- Section 179 expense deduction allows 100% first-year depreciation write-offs on assets like: • Equipment like printers, computers • Software • Office furniture
- Bonus depreciation also provides deductions for new equipment
Self-Employment Taxes When you work for yourself, you can deduct the employer portion of self-employment taxes paid – reducing overall tax liability.
Home Office Deduction If you use any part of your home exclusively for business operations, leverage home office deductions tracking:
- Rent, mortgage interest, taxes
- Utilities costs
- Repairs and renovations
Supplier & Inventory Costs All inventory and supplies exclusively used to produce end products or services are deductible – this could include materials, merchant fees, packaging and labels, shipping supplies etc.
Make sure to track all legitimate tax-deductible expenses. Assessing eligibility can be complex, so small business owners should leverage an accountant to maximize claims. Being vigilant and strategic with deductions saves big every filing season!
Let me know if you would like me to elaborate on any specific deduction in more detail or have additional ideas for the article.