If you own a sole proprietorship or LLC, every dollar that you can save counts. One way that you can improve your profits is through small business tax deductions.Â
The list of tax deductions is fairly long, and many businesses qualify for the deduction when filing small business taxes. If you are not aware of the deductions, this guide will list several options that your business should be able to deduct.
Business Property Rent
One of our top tax tips for small businesses is to always deduct your business property rental fees. Many businesses rent the property where they do business, and his expense is often eligible for deduction on your taxes.
If you run your business out of your house, you may be able to deduct a portion of your rent, mortgage, and utilities. your tax advisor will be a good source of details, so choose a tax advisor who understands small business tax law.
Interest On Your Loans
Taking out small loans is a common step when starting a small business. The capital allows business owners to buy equipment and other critical resources to launch and maintain a new business.
Did you know that the interest on your loan may be tax-deductible? The deductions can be substantial, especially during the first year of a loan when the majority of the payments are often just interest.
You may also be able to deduct debt. Business debt refers to money paid to an employer or vendor that was never honored. You will need to have proof that the business debt wasn’t a personal loan and was given for business purposes.
Machinery Leases
If you are looking for creative means of saving on taxes, consider deducting the cost of leasing equipment and machinery. Any business that relies on fabricating products often leases machinery to perform that task.
Office Furniture
Starting up a business can be expensive. There are seemingly endless supplies to order. The good news is that those expenses can actually save you money when paying taxes.
Be sure to keep receipts for any furniture or office supplies that you order. This includes computers, chairs, surge protects, and desks.
Employee Wages
Salaries paid to employees may be tax-deductible, depending on the type of taxes your business pays. Commissions and bonuses may be deductible as well. Benefits like health insurance, education assistance, retirement plans, and other benefits may be deducted too.
Learn More About Small Business Tax Deductions
Starting up a small business can be an exciting and challenging time. There are many things that need to be managed, and documenting small business tax deductions should be a top priority. Consider the tips in this article as a good starting point as you explore tax deduction options for your small business.
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