Commonly Overlooked Tax Write-Offs for Small Businesses
In case you didn’t get the memo, tax day is right around the corner. This year (2016), the Internal Revenue Service has placed a filing deadline of April 16, after which all returns will be considered late. If you’re a small business owner, you should use this time to double-check your financial documents to ensure you have all possible deductions accounted for. Today, we’re going to reveal some of the most commonly overlooked tax write-offs for small businesses.
If you work from home, guess what, you can deduct a portion of your mortgage/rent from your taxes. Unfortunately, many business owners overlook this deduction. According to AmericanExpress, 23.4 million returns were filed by sole proprietors for tax year 2011, yet only 7.6 million claimed a home office deduction. Furthermore, the IRS has simplified home office deductions to use a square foot formula, meaning your deduction is calculated based on the area size of your office instead of how much you pay in mortgage or rent. This is one of the best, and easiest, deductions to make, so don’t overlook it.
Do you pay a certified personal accountant (CPA) to maintain your financial documents and/or prepare your taxes? If so, you can deduct these expenses from your taxes. Whether the CPA has an on-going contract, or if they simply provide services for one month out of the year, you can deduct these costs.
From ATM fees to overdraft fees and more, these are typically tax-deductible.
Furniture and Office Supplies
Whether you work from home or at a separate office, you can deduct furniture and other office supplies from your taxes. This may include a desk, chair, computer, printer, printer paper, ink toner, pens, stationary, business cards and more. Assuming the items are used to run your business, they can be deducted from your taxes.
Small business owners can also deduct bad debt when filing their taxes. For instance, if your business recently loaded money to another business, and that other business failed to pay you back, you can write that loan off as a loss.
Of course, these are just a few of the many deductions that small business owners can make when filing their taxes. It’s recommended that you speak with a professional tax accountant to uncover ALL possible deductions.