With Tax Day one week away, here in the USA, it is time to think about filing your taxes, if you haven’t already. If you run a small business, here are some deductions the U.S. Small Business Administration shared recently via SmallBuzTrends.com. If you have a home based business, really trying to earn a profit, and working to make this your primary income, you should consider these tips. If you are really in it for a hobby, you can still use these deductions to reduce your income. However, hobbyists can only deduct to the extent they have income (in other words, you cannot take a loss). Here’s the list. Get details by reading the article, or consult your tax advisor. (And remember, I am not a tax advisor or financial professional!)
- Health Care Tax Credit. The Affordable Care act allows some extra deductions in some circumstances if you are small and provide employee health care as a benefit.
- Business Use of a Personal Vehicle. Use it in business? Keep a log? Get a deduction!
- Business Travel and Entertainment Expenses. Travel on business? Some of your expenses are deductible!
- Home Office Deduction. If you have space at home you use exclusively for the conduct of your business, you can write off some of your home expenses. If you own your home, there are some implications when you sell, so you really should talk to a professional about this.
- Start-up Costs. If your business started last year, some or all of your costs associated with getting started can be deducted in the tax year. If you have high costs, then some will have to be amortized over time.
- Professional Fees and Training Costs. Need professional advice? It is a legitimate deduction. I learned that if you pay them over certain thresholds, you might have to report that on a 1099-MISC. The filing date for that has passed, so you may be subject to a fine for late filing this year.
- Equipment and Software Purchases. You might think that these are capital expenses and must be depreciated, but there are thresholds below which certain things can be deducted in the year incurred. Check it out…
- Moving Costs. Did your business require you to relocate? If your workplace is 50 miles further than your old workplace, you can take a personal deduction. (OK, it’s not a business deduction, but it could still save you money.)
- Hiring Veterans. There are tax credits available for hiring veterans under certain circumstances.
- Charitable Donations. Donations to charity by business can be deductible. Check out the rules.
10 Small Business Tax Deductions You Shouldn’t Ignore at Small Business Trends