Tax season can be hectic for business owners. However, tax deductibles help business owners manage the costs of running the company. With that said, there are many tax deductibles that business owners may be overlooking. Here are 4 tax deductibles you may not know you can claim on your taxes this year.
When business owners think tax deductibles, many think of supplies, rent, and utilities. However, any business drives you make can qualify for a tax deduction as well. The IRS sets a reimbursement rate every year that allows business owners to earn a deduction from miles driven for business purposes. This means that business owners must keep track of their mileage throughout the year to get the most out of this tax deduction. Keep in mind, however, that you cannot do mileage and your vehicle expense – it is one or the other.
Continued education is important for business owners to remain leaders in their industry. For this reason, education is a qualifying tax-deductible expense. If you spend money on education that aligns with your industry, you should add these educational expenses this tax year. Things such as educational workshops, seminars, and training are all eligible. To track your educational expenses, ensure that you are paying for it through your business account.
Bank fees probably feel like a small deduction. However, these fees can add up over time. Any fees that you pay such as a monthly maintenance fee to keep your account running are tax-deductible. Even the cost of accessing the ATM, obtaining new checks, and other miscellaneous fees are considered appropriate. Just be sure to keep track of your bank fees and collect any receipts pertaining to the fees.
Many businesses are skeptical about claiming home office expenses on their taxes. However, home-based offices have become the norm in 2019. If you are a business owner that works out of your home, you can claim this expense on your taxes. The IRS has created a standard deduction for home office use to give business owners a better idea of what qualifies. For instance, there is no depreciation deduction and the deduction is only allowed if the home office uses a portion of the home and is used exclusively on a regular basis.
While tax season can be stressful for some business owners, understanding the deductions you benefit from is important to experience an easy and successful tax season. If you are a small business looking for financial coaching or tax advice, feel free to contact us today.
Tax Tips for the Self-Employed
Why Every Small Business Needs a Bookkeeper?
Tax Credits That Could Benefit Small Businesses
Why You Should, and Shouldn’t, Apply for a Tax Extension
What Is a Flow-Through Entity?
How the SECURE Act Impacts Small Business Owners