Check out what you can deduct on your taxes as a small business owner. Always be sure to have a professional prepare your taxes to get the money you deserve.
Home Office Deduction
If you use a portion of your home for business, you may be eligible for a home office deduction. Add up the space you use for your business, and consider claiming the home office tax deduction. The area you want to claim is reserved exclusively for business activities for it to qualify.
Just starting your small business? You might not realize you can deduct some costs related to your business. Up to $10,000, as long as your total startup costs are $50,000 or less.
What you pay in health insurance is tax-deductible if you no longer have access to a plan subsidized by your employer or your spouse’s employer. When you set up health insurance independently because of your small business, the premiums you pay for are deductible. Dental and long-term care premiums can be added in this calculation.
Personal Equipment Used for Your Business
If you started your small business on a budget, there is a good chance you have been using some of your personal equipment. For example, your home-office desk or personal computer. Have a list with the dates in which you started using the equipment and how often it was used. You can also depreciate the equipment value, based on fair-market value and the length of time you owned the equipment before using it in your business.
If you withdrew cash from your business account and were charged a fee, you might be able to deduct it on your return. As long as the money during the transaction was a business interaction (e.g. business travel, business meeting, etc.), you can claim these fees.
If you no longer have access to an employer-sponsored plan, such as your 401(k), you still need to prepare for retirement. One of the truly last-minute tax deductions you can claim as a small business owner is your Traditional IRA contribution. If you’re looking for a last-minute deduction, make a contribution good for the preceding tax year, and reduce its taxable income up until Tax Day.
Many small business owners find that it makes sense to choose a high-deductible healthcare plan to reduce their health insurance costs. To get more out of such a plan, a Health Savings Account (HSA) can help. Contributions are tax-deductible, and your money grows tax-free as long as you use it for qualified expenses. As with an IRA, you can make a previous-year contribution up until Tax Day.
Lodestar Advisors is a firm focused on tax saving strategies and accounting automation techniques to facilitate business growth for their clients. They are well versed in cash flow projections and business planning. Call for a free consultation.