Tax deductions for small businesses

Deduction claim for your home office:
If you can prove your tax deductions are legitimate, then there’s no reason you shouldn’t claim them, even if they’re tied to your home office. It’s all just a case of organizing your records correctly and being able to prove that your expenses are for your business.

Making sure your office space is clearly just that, as opposed to a desk pushed into the corner of your bedroom, or a small area in what would otherwise be the kids’ playroom, will go a long way.

Dedicating a PC or laptop to your business is essential, as if the kids were using it to Google the answers for their homework, then it will become clear that it is being used for more than just your business.

You will also be able to deduct a certain percentage of household expenses for your business, and this can be calculated by measuring your work/office area and dividing by the square footage of your home. What you are left with is the percentage of rent, mortgage, taxes, maintenance and utilities that you can claim.

Claim technology deductions
If you purchase new technology for your business (a computer, printer, or business-related software), it will be tax deductible up to a certain amount. The full cost can be deducted in the year of purchase or over multiple years. However, the amount you can deduct will often change, so it is wise to be aware of the current limitations under section 179 before filing your claim.

A company car may also be tax deductible, but it must be a vehicle used strictly for business purposes.

Subscriptions to business-related magazines and websites are also fully deductible.

Claim deductions for travel expenses
Many travel-related expenses are fully tax-deductible, but if your family is traveling with you, make sure you claim only for yourself and only for business-related expenses.

Foods
Meals with clients have a 50% deductible, but it’s a good idea to note the purpose of the meal on your receipt, in case you’re asked to provide proof to the IRS.

conference fees
If you attend a conference that is directly related to your business or industry, and was genuinely helpful to you in business terms, then any fees you incur are likely to be deductible.

Perhaps the most important thing to remember when thinking about tax deductions for your small business is to keep detailed records of all purchases and save every receipt; While it may seem like a lot of effort at first, it will prove its worth when you try to file your taxes, and especially if your business is subject to an audit.

When in doubt, simply call on the services of a tax professional, who will have a much clearer idea of ​​what is and is not deductible, as well as an up-to-date knowledge of all relevant tax laws and regulations for your state.