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Need a little help with your taxes? You may think you’ve entered every deduction possible, but small business owners don’t always know all the things they can deduct. After all, you’re a business owner, not a tax expert!
But that’s why we’re here: to make sure you’ve got all the financial help you need! There are a few tax deductions that almost every small business owner misses that could potentially save them tons of money. Let’s go over them and see if they could help you this year.
Even the most “homebody” of small business owners makes business trips. Well, maybe not “business trips” in the traditional sense of leaving on a jet plane, but more along the lines of “trips for your business.” It could be a quick run to the store for supplies or yet another jaunt to the post office. No matter the trip, you used some gas and put a bit of wear and tear on your vehicle to get there.
You may not have realized it, but you can deduct these expenses on your taxes. Although a quick 5-mile trip, at 55.5 cents per mile, may not seem like a huge tax break, multiply that by 1000 miles over the course of a year and suddenly you see where it would make a difference.
The main thing to remember (as with all your tax deductions) is to save your receipts. It’s one thing to claim that trip you took to Florida for a business convention, it’s another entirely when the IRS says “prove it!” Check out Outright for how to track and deduct mileage.
One of the most underutilized deductions out there is the home office deduction – deducting a portion of your rent/mortgage and utilities that you pay for your home office. Rumors swirl that this deduction is the most likely to get you audited. But that’s not so... if you’re careful to play by the rules.
To take the home office deduction, the area you use for your home business must be primarily used for business purposes. In other words, you can’t just set up on your kitchen table and expect to get the deduction. If you have a spare bedroom and the only reason you go inside is to work, then you can claim the deduction. If this is also the kids’ playroom, though, then you’d better not try.
While this deduction is helpful in of itself, it can also lead to further tax help. For example, once you establish you have a home office, you can take other common deductions associated with an office. This includes utilities like electricity, Internet, and even water. While you can’t claim all the utilities, the portion you do will still make a big difference when it’s time to pay…or get a check!
As with mileage, make sure you keep proper documentation. There are some unfortunate false claims and the IRS won’t take kindly to anyone trying to pull one over their eyes. If you keep all your paperwork in order, though, you should be fine. Check out the Outright Help Center for more detailed information about the home office deduction.