The end of the year can often be a hectic time for small business owners. Between all the holidays, you may feel like your yearly taxes have taken last priority, but it’s to your advantage to get your ducks in a row before tax season begins. With your busy schedule, trying to get in last-minute donations and properly record all your deductions may feel like an immense burden, but it doesn’t need to be. Making sure not to miss any deductions will help you save money for your small business and help you grow your sales. Here are 12 tax deductions for your small business that can get you cash back this tax season.
Whether your businesses uses a car, truck, or SUV, keeping a record of your transportation expenses is one of the easiest ways to get money back when tax season comes. Make sure to hold on to any receipts from gas stations, any auto body shops you go to, parking payments or tolls you accumulate while working, and also the number of miles you travel while working. The IRS standard mileage rate, also known as the amount per mile you’re allowed to deduct, is typically around 54.5 cents per mile—be sure to deduct whichever amount is higher from your taxes to get the maximum refund (Source: IRS).
Did you know that donations are actually tax deductible? Yes, you can help your community and your business at the same time! By making a qualified donation of supplies, money, or property to a 501(c)(3)s nonprofit organization, you may be able to record it as a tax deduction when April comes. Make sure to get a receipt and stay within your taxable income limitation in order for it to qualify as a deduction (Source: The Tax Advisor). We recommend using labels in your email inbox for categorizing these electronic receipts so that it’s easy to find come March or April.
If you use Photoshop to enhance your digital marketing, a marketing automation platform, or an email marketing service, you’re in luck! Depending on your state and your business, some subscriptions, such as magazines or software, may qualify as expenses and could be cited as deductions. Supplies used on a weekly or monthly basis can also count as an expense on your taxes, but supplies used over time, such as printers and desks, should be deducted over a number of years.
Rental costs for your office, storage unit, factory, or other business expense may be deductible. If you work from home, consult with a tax professional to determine the total amount you are able to claim.
When including rent in your deductions, don’t forget to also include your utilities! Utilities can include anything relating to your office space, such as a water bill, electricity, gas, internet, and phone bills. Much like claiming rent, if you work from home, consult with a tax professional to determine the total amount you are able to claim.
If you took any workshops, courses, online classes relevant to your small business or for professional certification, these work-related educational expenses may be deductible, especially if required by your employer. These must be geared towards your position and industry, such as renewing a professional license, remaining compliant with regulations, or completing a series exam.
Almost all insurance relating to your business, such as professional liability insurance, renters insurance, and life insurance may all be fully deductible on your taxes. Deducting health insurance expenses on your taxes varies by company and by state, so be sure to consult with a tax professional when completing this section of your taxes.
If your team goes out for drinks, dinner, and trivia four times a year as a team building activity, or if you take clients out for entertaining purposes, be sure to keep your receipt from that night as you pick up the tab for your employees. Office parties and outings, client lunches, and even Happy Hour may be considered tax-deductible, as long as these events are held for the benefit of its employees or clients.
If you offer your employees some means of child care assistance, a stipend, or on-site daycare, you deserve to be rewarded for being an awesome employer. Almost all child care related expenses are tax deductible, such as educational assistance and dependent care assistance, so you may be in luck.
If you or your employees are required to travel out of town on business for any reason, such as a conference or meeting a client, the cost of the flight, or other means of transportation, and lodging may be fully deductible. There are several qualifiers outlined here in order to claim any travel deduction, so make sure to consult with a tax professional before making any business-based travel decisions.
Any fees you pay for professional services you receive, such as a contract marketing consultant or tax professional, may be tax deductible. There are several restrictions about the kind of services you can count as expenses on your taxes, so always be sure to consult a tax professional before making any hiring decisions.
Any business calls you make may be fully deductible, regardless of whether you make them on a personal or business phone. Make sure to keep close records of the calls you make so you are easily able to separate them from your personal conversations. While a personal device is only partially deductible, if you have a separate business line, this may be fully deductible.
This blog post is to be used for informational purposes only. Always consult a tax professional when completing your taxes in order to receive the most accurate and updated information.