5 Tax Deductions You Don’t Want to Miss!
Have you ever returned home from your favorite big-box store only to realize that you had a killer coupon you could have used…if you hadn’t left it at home?
50% off one regular price item
30% off your entire purchase – one day only!
The money you could have saved with your coupon would have offset the cost of a few more household necessities. And you’re pretty upset about it.
No one wants to leave money on the table.
It’s no different from your taxes. The money you leave on the table is money you could reinvest in your business. Here are five business deductions you might not know about that can help you maximize your tax return and more easily grow your business.
#1: Business start-up and organizational costs
If you’re purchasing a business, creating a business or exploring the possibility of creating a business, save your receipts! These start-up expenses may be deducted up to 5k in the first year of business. And if things fall through and you don’t end up starting or purchasing a business, you may still be able to recoup at least some of the cost. Legal and professional fees you incur forming or registering a business may also be deductible up to 5k in the first year.
#2: Carrying charges
While some carrying charges can be deducted, most of them have to be capitalized and depreciated over the life of the asset. When you purchase business assets, keep track of all expenses including fees for insurance, setup, storage and incidentals as well as fees and interest for any loans.
#3: Petty cash expenses
Any money you use to pay for business purchases can be expensed. Paper for the copier, coffee and donuts for a meeting, name tags for a conference…they really add up! Keep track by storing a logbook in a central place and reminding employees to enter information for all petty cash expenses – what the expense is for, the date, the time and the amount – and enclose the receipts. Then enter these expenses monthly into your business accounting system.
#4: Document prep costs
If you have documents prepared, printed or bound or need to consult an attorney or accountant to help you prepare a business plan or compile financial data, keep track of your expenses. These professional fees are deductible even if, for example, a loan you’re applying for falls through.
#5: Car expenses
Anytime you drive your vehicle for business (excluding your commute to and from work), you can deduct your mileage. This includes any driving during your workday to another work-related location. The easiest way to keep track of business mileage is through a mileage-tracking app such as Everlance or MileIQ.
Rock your taxes and maximize your deductions this year. If you have questions about tax deductions, we would be more than happy to advise you so you’re set for success! You can reach us at awood@woodcpamn.com.
