Don't Miss these 5 Tax Deductibles
1. Your home office.
Do you work from an office at home? Then you can deduct expenses related to that home office! These can include insurance, mortgage interest payments, repairs and utilities like internet service.
You do, of course, have to determine what portion of your home is dedicated to running your business. This deduction can benefit both people who rent or own their home. Whether you are doing small business taxes in Wilton Manors or wherever, this rule applies.
2. Your car expenses.
Again, you will need to calculate what percentage of the time your car is being used for work. From there, you can apply that percentage to your overall car expenses.
There are two types of deductions available for this catagory: the IRS's standard mileage rate or your actual car expenses (including insurance, gas, and repairs). Figure out which one makes the most financial sense before filing so you can maximize your savings.
3. Your business equipment.
The IRS allows small business owners to avoid tracking depreciation by treating equipment as a business expense in the year it was purchased (with a limit of up to $500,000). Business equipment is counted as anything a small business owner may need to run a business. From a commercial oven to chairs/desks, to computer items.
4. Don't sell your old equipment.
If you want to get rid of property that's no longer getting you a return on investment to your business, find out whether it would be better to abandon it (an ordinary loss) or to sell it (a capital loss).
An ordinary loss is fully deductible, so find out how your property may be classified under Section 1231 to determine how you should rid yourself of it.
5. Keep good track of all receipts.
Receipts create the financial dashboard of how you spent your money throughout the year. Many of those receipts are for goods and services that can be deducted on your taxes, offsetting taxable income. Depending on your business structure, there are specific deductions you can take for certain structures, plus deductions that apply across all structures. It's very helpful to find a good software program such as Quickbooks to help you keep track of these expenses, and to hire a professional book-keeper. James Ridout offers excellent small business bookkeeping in Wilton Manors.