April is tax time, and business owners are often less excited about that than the general public. Why? Often, business owners owe taxes rather than getting a big refund.
However, you can lower your tax burden when you know the write-offs to use against your income. Having the correct write-offs will save you thousands of dollars, so be sure you save this article for future reference!
Let’s take a look at three of the best write-offs for businesses.
1. Home Office Deduction
Do you work from home instead of renting an office or a desk? Do you have a specific room set up as an office? If so, you can write off your home office space. Very simply, determine what percentage of your home the office represents. A bedroom might be 20%, for example.
Then, you can write off 20% of your rent or mortgage and 20% of your home utilities. That can be a significant amount of money!
Keep in mind that this only works if you have a room that’s only an office. It can’t be a bedroom that has a desk in it. So set up a nice office for yourself, and you’ll be doubly glad at tax time.
2. Vehicle-Related Deductions
If you use your car in the course of your business, you can write off the usage as well. You can either determine what percentage of your vehicle use is business and write off that percentage of your vehicle costs and insurance, or you can use a standard deduction per mile that you drive for business.
On that note, it’s important to have the right car insurance, especially if you’re driving for business. Always shop around and look for highly-rated insurance reviews. Freeway Insurance reviews are always in the 5 star range and you can get a free quote from them.
3. Other Costs of Doing Business
Any costs that you incur in the normal course of business count as write-offs. That includes using your internet and cell phone for business (you can use the percentage method described above), any training and learning materials you buy for business, and subscriptions you maintain.
For example, if you need specific software to do your work, the cost of the software is tax-deductible. Printer ink, notebooks, paper, and other office supplies are as well. You can also write off marketing expenses and fees you pay for professional services, including getting your taxes done.
As you can see, there are a lot of little things that are write-offs, and they add up, so don’t miss out on these deductions.
Get the Tax Deductions You Deserve
Running a business isn’t easy, and you deserve to take advantage of the tax deductions available to you. If you use something in the course of your business or have regular expenses you wouldn’t have without your company, be sure to write those off on your tax return.
Once you do, you’ll enjoy a much lower tax bill!
Note: This does not constitute financial advice. Please consult your tax expert or attorney before making financial decisions, including tax filings.