The SBA reports there are more than 30 million small businesses in the US.
If you’re one of the small business owners in America, there’s likely one thing on your mind right now. The deadline for filing your taxes is coming up.
Calculating your taxes may have you asking how you can make your business more tax efficient. Take a look at these nine tax deductions for small business. They could help you reduce your tax bill.
Table of Contents
1. Labor of All Sorts is Deductible
Did you hire someone to help you around the office last year? Maybe you worked with a contractor to complete a special project. You might have finally hired your first employee.
Wages, salaries, and fees paid to contractors are all tax deductible. Commissions, bonuses, and other fringe benefits are also tax deductible.
Labor costs are often one of the most significant overhead costs for a business. Don’t forget to take advantage of it when you file your 2018 taxes. Tax tools help you make your business more tax efficient. Take a look at these nine tax deductions for small business. They could help you reduce your tax bill.
2. Deduct Your Insurance
In many states, you’ll need to have various kinds of business insurance. It’s often a good idea to take out a policy anyway since business insurance can protect you and your operations.
General liability insurance is usually the minimum. You may also need business auto insurance or business property insurance.
Another good investment is business continuation insurance. This policy protects you if you have to suspend operations because of a natural disaster.
Some business owners hesitate to buy policies unless they’re mandated by the state. You might rethink your approach to insurance knowing the costs are tax deductible.
If you took out even one business-specific insurance policy, be sure to claim it on your taxes.
3. Write Off Fees for Professional Services
Did you know you can write off the fees you pay to consult with the experts? If you engage an accountant or a bookkeeper, you can write those costs off. The same is true if you get legal advice from a lawyer.
This tax deduction could help you get access to the expert help you need to get tax relief for your business. Learn more about tax relief companies and what they can do for you.
4. Tax Deductions for Small Business Include Supplies
Business deductions include many of the items you buy to keep your business running. This includes big-ticket items like computer equipment or company vehicles.
You might not have realized that it also includes the supplies you use, such as stamps or the ink for your printer. You may even be able to write off cleaning supplies.
There are some limits, so you may not be able to write off everything you buy for the business. Consult with a bookkeeper or accountant to determine if an expense can be deducted.
5. Write Off Interest on Debt
Did you take out a loan for your business? Maybe you had an existing loan that you paid interest on. If so, don’t forget to include those interest payments in your business deductions.
The rationale behind this tax deduction is simple. The loan was necessary to keep your business running. Making those interest payments were then a necessary business expense.
Do be aware of the rules around different kinds of loans. The interest on a loan used to buy a business is treated differently than other loans. It can be a bit difficult to sort out exactly where and how to claim this deduction, so be sure to consult with a tax expert.
6. Charitable Donations Write Down Tax
There are many good reasons to donate to charity. Your funds could go toward a cause you really believe it. Your financial help could benefit people in your community.
Making donations also helps you cement a reputation as a good corporate citizen.
You can also write those donations off on your taxes. If you donated to a charity in 2018, don’t forget to claim it on your taxes. If you didn’t donate last year, knowing you can write it off might convince you to pick up your checkbook for next year.
7. Deduct the Cost of the Office
Whether you rent your space or own the building, you can use the costs to write down your tax bill.
If you rent office space, a warehouse, or another property, you can deduct your rent in full. If you own the property and have a mortgage on it, you can write off the interest on your mortgage payments.
You can also write off utilities, such as electricity and telephone costs.
8. Equipment Costs Are Deductible
There are also tax deductions for the equipment you need to run your business. If you run a construction business, this could include the machinery you use to dig holes or grade land. If you have a manufacturing operation, the machines you use can be written off as well.
In the office, you might deduct the costs of computers and printers.
If you rent equipment, the rental cost is also deductible.
9. Write Off Employee Benefits and Claim Credits
Small business tax deductions make it more workable to offer your employees benefits. If you offer your employees help with education or care for their dependents, you can deduct the costs.
You can also deduct contributions to employees’ retirement plan accounts. The plan will have to meet certain qualifications so you can claim this deduction.
Get Effective Tax Relief Now
As you can see, there are plenty of tax deductions for small business owners like you. Claiming some or all these can help you reduce your tax bill and find tax relief.
These aren’t the only tax deductions you may be entitled to. A bookkeeper or accountant can help you achieve better tax efficiency for your business.
Are you looking for other ways to improve the financial health of your company? Check out our blog for more sound financial advice.
