Owning and running a small business is an exciting and rewarding endeavor, but it also comes with a lot of responsibility—especially on the subject of taxes. It’s important to stay organized with receipts, invoices, past payments and expense records.
It’s easy to overlook some lesser-known deductions that could make a big difference in your bottom line. From home office deductions to business meals and entertainment, these deductions can help small business owners save money.
Let’s discuss some commonly overlooked tax deductions for small business owners.
1. Health Insurance Premiums
With the right health plan, you can deduct up to 60% of your premiums, reducing your tax bill and freeing up money for other investments. This deduction is also available to self-employed individuals, so you can still take advantage of it if you’re the only person in your business. This deduction is also available to business owners who don’t offer health insurance to their employees.
As such, even if you’re not required to provide health insurance to your employees, you can still benefit from this tax deduction. Health insurance premiums are often overlooked when it comes to filing taxes, but they can add up to significant savings.
2. Mileage
If you are using your car for business purposes, you may be eligible to deduct a portion of your car expenses from your taxes. Such deductions include:
- The cost of gas
- Insurance
- Repairs, and more.
To qualify for this deduction, you must:
- Track your mileage
- Keep accurate records of your business trips
- You must keep receipts of all car-related purchases and maintenance
However, you should note that the deduction amount can vary depending on how many miles you drive and how much you spend on car expenses.
3. Home Office and Remote Working Expenses
If you use your home office or another remote workspace for business purposes, you may be eligible to deduct some of your related expenses. Home office and remote working expenses include the cost of furniture, office supplies, internet, phone bills, and more.
Moreover, if you use a portion of your home exclusively for business, you may be able to deduct a portion of your mortgage interest, property taxes, utility bills, and other expenses. So, if you’re not claiming these deductions, now’s a great time to start. Taking advantage of these deductions can help you save money and maximize your profits.
4. Training and Education Expenses
If you’re investing in your business by taking courses or attending seminars, you can deduct these costs from your taxes. Essentially, training and education expenses include seminars, conferences, workshops, and any materials you purchase to help employees (or yourself) learn new skills. They can also include tuition and fees associated with higher education, as long as the course is related to the business.
You can deduct any materials you purchase for the course, such as textbooks, workbooks, and other supplies. Training and education expenses also include the cost of any certification or credential you may be required to obtain for the job. For example, if you’re a realtor, you can deduct the costs of taking the required courses to obtain your license.
It’s important to keep track of all your training and education expenses throughout the year to take advantage of these deductions when filing your taxes.
Trust Us with Tax-Related Matters
For small business owners, understanding and taking advantage of all the available tax deductions can be a complicated and time-consuming task. With extensive expertise in the sector, the professionals at Goode Bookkeeping & Consulting understand the complexities linked with the IRS. Let us make sure your business complies with all applicable laws and regulations.
Take advantage of deductions, credits, and other incentives that may otherwise go unnoticed.