For some, small business accounting can be a nightmare. Can you picture it now (or maybe you’re already there)? Lost sleep agonizing over what “counts” and what doesn’t, bad dreams of lost receipts that leave you sweating, countless hours spent thinking about all of the ins and outs of expenses…and it only gets worse as tax season sneaks onto the calendar.
When beginning as an entrepreneur, it’s easy to forget about all of those expenses that helps your business sail smoothly. From software to meals and office space to travel, there are tons business costs that you might be able to expense. We’re here to point you in the right direction, and in turn, save you time and money. Here’s a round-up of 12 possible tax deductions that may not be on your radar:
12 Possible Tax Deductions
1. Online Services
If you’ve paid to upgrade your Dropbox, purchased software (Quickbooks, anyone?), or made any other purchase for online services, these are considered business expenses that are tax deductible. As a general rule of thumb, these services should be used for business purposes only. That means no personal photos in your Dropbox folder!
2. Home Office Space
Having a home office as a dedicated work space is considered a business expense. Even a portion of a room, a desk, or a nook that is used as a home office can be deducted. The key is to measure your work area and divide that by the total footage of your home. Be honest, here, though. A computer in the family room that your kids use for their homework after office hours won’t cut it.
3. Office Supplies
Have you purchased file folders, staplers, pens and pencils, desk calendars, or any other office supplies for your business? If so, save those receipts! While it might seem tedious to keep receipts for $11.32 here and $16.49 there, having them will be helpful because guess what? That’s right… Deduction!
If you have a phone, computer, iPad, or other device that you use solely for business, plan to deduct that expense, too. Are you picking up what we’re throwing down? It’s all about being diligent about your documentation.
While day to day meals aren’t considered business expenses, those early morning coffees and cocktails at happy hour business meetings are. Don’t forget to take your receipts and store them for safe-keeping.
Self-employment usually means that you’re paying for your health insurance premiums yourself, too. Lucky for you, the costs are definitely a business expense. Make sure you read the fine print on this one (or have your team member at AcuityComplete do that for you); there’s some fine print about spousal coverage and deductions.
7. Charitable Contributions
In today’s world, many small businesses are seeking ways to give back to their community and communities abroad. If you make a charitable contribution to a nonprofit, it is considered tax deductible. As always, you keep a record of the contribution in some way (even if it’s a phone bill verifying a conversation).
Uncle Sam believes in education, so maintaining licensing, paying to train new employees, and taking classes to improve skills can all be deducted.
Magazines, newspapers, or other subscriptions and books that relate to your business can be written off. In other words, it pays to keep your nose in a book and stay on top of trends in your industry in more ways than one.
10. Conferences & Trade Shows
Staying a student is a smart move for your business, but can often be a financial commitment (ie. burden). Sleep better in bland conference hotels knowing that this expense is deductible, too.
Speaking of conferences and trade shows, did you have to travel to get there? Rent a car? Sleep in a hotel? All of these expenses are 100% deductible. Just remember that you can only expense 50% of your meals, so while you can splurge on where you rest your head, skip the late night room service.
12. Parking Fees
While fees you pay to park at your place of business cannot be deducted, parking expenses acquired while visiting clients for business-related purposes can be.
This list is by no means comprehensive and is just a fraction of the items that are considered business expenses for taxes. That means that you could be saving money with each expense, and as they say, “a penny saved, is a penny earned.” Getting help with bookkeeping can ease tax season anxiety and simplify the process, especially if accounting isn’t your cup of tea. Let us do some of the hard work for you, or learn more about getting started and talk to an expert now.