What Tax Deductions are Available to my Small Business?
Tax season is coming up, which means it’s time to get your business’s financial accounting for 2019 in order. Deductions are important for small businesses to make, as they can lower tax dues and improve your return. But what deductions are available for you to make this tax season? Take a look at our list to find out:
Small Business Deductions
Your business is likely not eligible to file for every tax deduction available, but being aware of what you can deduct is key to saving money in 2020. Some of the deductions available to small businesses include:
1. Home Office: Is your business run from home? Do you perform any amount of work for your small business in your own house? You may be able to make home office deductions, which can even include a percentage of your mortgage payment (based on the square footage of the office space in your home).
2. Professional Services: Most small businesses don’t have in-house accountants or business consultants, so they hire professionals to render these services. Fees and related expenses for these services can be deducted come tax time.
3. Office Supplies: Conventional office expenses and business supplies can be deducted as well. Just remember to file and save all receipts from these purchases.
4. Vehicle Expenses: If your small business requires company vehicles to carry out your services or deliver your products, you may be eligible to deduct related expenses, including maintenance, repairs, gas, parking fees, tolls, and more.
5. Furniture & Equipment: When it comes to office furniture and equipment that you need to run your business, you can either deduct the entire cost for the previous year, or you may depreciate these purchases over a 7-year period.
6. Employee Benefits: An advantage of offering benefits to the employees of your small business is that you can deduct them when tax season arrives. Eligible benefits include health plans, pensions, education reimbursement, life insurance, and more.
7. Client/Employee Entertainment: As long as you entertain clients or employees in a business setting, for business purposes, and actually discuss business with them, you can deduct outings like lunch meetings or other outings.
8. Work Opportunity Tax Credit: Although not a deduction, this tax credit is available to certain businesses that have hired long-term unemployed workers or military veterans in 2019.
Some additional deductions that are popular with small businesses are:
- Bonus Depreciation
- Salaries & Wages
- Freelance or Independent Contractor Labor
- Computer Software
- Office Leasing Costs
- Travel Expenses
- Equipment Rental
- Loan Interest
- Disaster & Theft Losses
- Charitable Deductions
- Moving Expenses
- Trademarks and Other Intellectual Property
Looking for Small Business Tax Help in Baltimore, MD?
Tax deductions are just one aspect of financial business accounting that need to be addressed this season. For the help your business needs in tax preparation and other areas of finances or accounting, there’s The CFO Source. We are a Maryland accounting, business consulting, and tax services firm that is dedicated to providing businesses with the 1-on-1 financial assistance they need to succeed.
Let handling your taxes this season be a breeze for your small business and contact us today to get started.