Nyle Wilson 
Tax deductions (commonly referred to as “tax write-offs”) allow you to lower the amount of income subject to taxation and can save thousands in taxes.
Virtually all expenses incurred while running your business can be deducted, from paper and pens to office furniture.
Taxes
Tax deductions or write-offs are legally permissible subtractions from income that reduce taxable business profit and, ultimately, overall tax liability for companies. They can include expenses such as legal fees, market research costs and startup costs–even meals with clients! It’s essential that these expenses meet the IRS definition of “ordinary and necessary,” while detailed records should be kept to document them for each trade or business activity claiming them as deductions.
As a small business just getting off the ground, this tax break is especially beneficial. Begin by calculating your raw materials, storage and labor costs as well as factory overhead; additionally, any cost for training that directly relates to your industry or profession may also be deducted.
Recent tax code revisions have introduced an important deduction for small businesses called the QBI (Qualified Business Income). Eligible small companies can claim this deduction on up to 20% of pass-through profits, potentially saving themselves tens of thousands in taxes.
Insurance
Some small business owners may not realize that insurance premiums can be deducted under IRS guidelines. Small businesses can deduct premiums for fire, auto, credit and liability policies as well as those used exclusively for their business; deductibility also extends to professional services fees including legal and accounting services fees.
Home offices may qualify for tax deduction, with certain restrictions and guidelines in mind. To be tax deductible, however, they must be used exclusively and regularly for business. Simply using your kitchen table as a desk won’t do.
Education expenses directly related to an employee’s job at your company can also be tax-deductible; however, general education courses not related to your role do not qualify. Consult a tax professional in order to take full advantage of these valuable deductions; even just spending some effort understanding them can make a significant difference to your bottom line.
Business Loans
An SBA loan can be an invaluable asset to any small business, and the interest you pay on it is tax-deductible. Many business owners forget this fact but it could save them thousands in costs over time.
Electricity, water, heat and sewer fees are deductible expenses in your business. So too is office furniture costs (provided that they don’t include expensive designer chairs). Furthermore, deductions can also include home gym membership fees, team lunches or parties related to your industry as well as continuing education classes related to it.
Remember to consult a tax professional when considering whether small-business deductions are legitimate, since not all may pass IRS scrutiny. They can assist with filing tax returns as well as provide advice, representation and representation before the IRS. They can also help make better decisions regarding how you spend your income.
Miscellaneous Expenses
Taxes for small business owners can quickly increase if expenses aren’t monitored as they accrue. While expenses like utilities, wages, rent, inventory and insurance policies should all be tracked as they occur, miscellaneous expenses should include costs that don’t fit neatly into existing expense categories like office supplies subscriptions and one-off purchases that arise outside these categories.
These expenses may include items like pens, paper and cleaning products used to manage the workday or software subscriptions that streamline operations, travel expenses with clients or expenses that support company goals such as networking or training.
All expenses may seem inconsequential at first glance, yet can quickly add up without an expense management system in place. A qualified Block Advisors accountant can review your bookkeeping to make sure all available tax deductions for small business tax deductions have been claimed. Contact us to arrange an appointment now as our in-person and online bookkeeping services are offered across the nation.
