Top 5 Deductions That Most Small Business Owners Miss

by DenverBookkeeper

In honor of the upcoming tax season, we wanted to give you a head’s up about the Top 5 Tax Deductions that most small business owners miss!

January signals the official start of tax season. The holidays are over, and it is now time to prepare to file income taxes. Filing taxes is a stressful part of any organization, but so is paying too much in those taxes. And be sure to know when that tax return is due…..partnership and corporate returns are due March 15, individual returns, April 15th. Let’s review the top 5 deductions that many small business owners miss.

Top 5 Deductions That Most Small Business Owners MissFor example, if you are a business owner and you pay for half of your employee’s healthcare, you may be eligible for tax credit of a percentage on what you have spent on health insurance premiums. The percentage is determined by your country. Your credit can be maximized if you have a certain amount of employees whom averages a certain amount of annual wages. Check with your income tax preparer on the details of maximizing your credit.

If you are self-employed and you pay for your own insurance, the payments you made can be eligible for deduction. Always remember, there is a difference between your income tax and your self-employment tax. Check with your tax preparer.

If you purchased a vehicle last year, you can depreciate your vehicle this year. The gasoline you purchase and any work done for the vehicle may be eligible for deduction. In many cases, the gasoline and maintenance of the vehicle is only 100% deductible if you use the vehicle solely for company business. Again, check with your tax preparer for your specific case.

Traveling is often an integral part of a company. Company owners, trainers and employees who travel for company purposes can deduct the expenses to a certain percentage. Any travel an owner or employee takes for commerce purposes are likely deductible. Things deductible are items like travel costs, meals, baggage fees, hotel rooms, cab fares, and any other applicable fees. It is essential to keep the receipts for these items noting the purpose of the trip.

If a company owner operates out of his or her home, he may want to utilize the home office deduction. It’s not uncommon for companies operating out of the home, to overlook the many tax breaks and advantages. The assets, items, and even the space used in the home can be calculated for deductible taxes. There are some specific rules that must be followed though, so check with your tax preparer for specifics.

Now that you know the top 5 deductions that most small business owners miss, do your due diligence on the intricacies of these aspects. Everyone’s situation is different.

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