As a business owner, you put a lot of energy, time, and money into your business. At the end of the year what can your business give back to you?
As a sole proprietor or LLC, there are a number of tax deductions you can claim. Whether you use a home office or rent office space, keeping track of what you can deduct during the course of the year will make it much easier to find the receipts you need.
Take the time to set up file folders for next year’s tax preparation. When you know what your deductions will be, it is easy to set up your filing system to keep those receipts.
Related: It’s Time! Make Filing Your Paperwork a Priority Now.
This list of tax deductions will organize your file folders and ensure your business will give back to you at the end of each year.
1.Home office – The square footage of your office space used solely for business on a regular basis for meetings with clients or customers.
2. Office supplies – Materials you use over the course of the year for business such as furniture, copy machine, computer, printer paper, ink, toner, paperclips, etc.
3. Telephone – Telephone expenses are deductible when the phone is used for business purposes.
4. Auto – Auto expenses include business mileage and repair expenses for your business vehicle. You can also depreciate your vehicle. Machinery you purchase for your business and any rental and lease expenses for machinery can also be deducted. If your vehicle is not solely used for business, you can deduct a percentage of your auto expenses.
5. Health insurance premiums – Insurance premiums are deductible when paid by you but not if the insurance premiums are paid by your employer or spouse through their job.
6. Bad debt – You can deduct a bad debt if there was no intention at the time of the transaction to make a loan and not a gift and if you have no reasonable expectation that the non-business debt will be repaid.
7. Utilities – If you have a home office, a percentage of your water, gas, electric, cable, and internet costs are deductible.
8. Meals – 50% of business related meals and entertainment are deductible. Taking clients out to eat, feeding your employees, and office parties for all employees are also deductible.
9. Travel – Travel expenses are expenses traveling away from home for your business, profession, or job.
10. Legal – Business related expenses that include lawyer fees, CPA, and Accountant fees.
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11. Advertising – All advertising expenses are deductible including printing materials, designs, radio, television and internet ads, business cards, brochures, mailers, website, web hosting, etc.
12. Postage – Stamps and postage for shipping products are placed under office expenses or under Cost Of Goods Sold if related to shipping a product that was sold.
13. Freight – Freight charges and expenses including UPS and FedEx charges along with boxing and packing materials are listed under Cost of Goods Sold if related to shipping a product that was sold.
14. Education – Education can be deducted if it is work-related and is required to keep your present job, status, or salary and improve your skills needed for the job.
Check here for IRS expenses you cannot deduct.
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