How Small Business Can Use Tax Deductions

When you’re running a small business, one of the best ways to save money is to take advantage of tax deductions available to you. Here are some to look into.

1. Home Office Space

If you’re running your startup out of your home, you can usually write off your workspace as long as you use it exclusively for your business. The IRS has made adjustments so that it’s easier to calculate how much you can deduct, but you need to make sure that you’re fully meeting all of their criteria for this write-off so that you don’t run into any trouble down the road.

2. Transportation Expenses

Similar to using a space in your home, if you use your personal car for business purposes, you can write off some of these expenses. From repairs and gas to tolls and parking fees, you can get tax deductions on all of these costs. You can do this by using the actual expense method, which means you keep track of all of the costs you incur while conducting your business, or by using the standard mileage rate method, where you deduct a certain amount for each mile you drive.

3. Startup Costs

A certain amount of the expenses that come with the first year starting your business are tax deductible, usually up to about $5,000-$10,000 total. These are costs that every small business owner has, so make sure you take full advantage of this opportunity to save some money.

4. Health Care

One of the complications that comes with starting your own business is finding an affordable healthcare plan for you and your family. The good news is that these costs are tax deductible, though. If you have an individual policy in your name or your business’s name, the cost of your and your family’s premiums can be deducted, as well as some out-of-pocket expenses.

5. Business Trips

If you take a trip on behalf of your small business, you can write off many of those costs. Your transportation and hotel expenses, as well as some of your meals, are typically covered. The line between professional and personal in this area can get blurry, though, so make sure you’re keeping careful records and only pursuing deductions for costs that you are sure are 100% business-related.

Tax deductions can be a great way to save money for your startup. Look into these options and take advantage of them, but be sure to stay well within the IRS’s requirements. A little money saved now is not worth the consequences that may come in the future for being dishonest with these expenses.

Comments

Post a Comment

Popular posts from this blog

30-year Commercial Money? Yes!

W. Karl Baker, CPA When discussing commercial financing needs with prospective clients, one of the first things we get asked all the time is “What’s the rate?”  That depends on a lot of factors, such as property address, the borrower’s credit score, net cash flows from the lease agreement, leverage and a few other factors.   We also remind clients that “rate” is important but is not always the most important factor if cash flow is the goal. It’s certainly not the only factor to evaluate.   We also are asked, “What’s the term of your notes?”  Many people are surprised that it is possible to obtain 30-year commercial money, especially if their only experience is what banks offer.  So there’s usually a follow-up question when we tell them about our 30-year fixed rate commercial mortgages:  “Is it really FIXED for 30 years, and it’s a commercial note?”, said with some astonishment!  Our response is “YES!  You really can get a 30-year fixed-r...
Read more

Utilizing the BRRRR Strategy for Developing Your Real Estate Portfolio

In the dynamic realm of real estate investment, success often relies on strategic methods that enhance returns while mitigating risks. A popular approach among astute investors is the BRRRR strategy: Buy, Rehab, Rent, Refinance, Repeat. This effective framework enables investors to build a strong real estate portfolio, leverage property value appreciation, and utilize financial tools like the Debt Service Coverage Ratio (DSCR) loan. This article delves into how combining the BRRRR strategy, rehabilitation, and DSCR loans can propel investors towards their financial objectives, supported by Infinity Commercial Capital’s tailored financing solutions. The BRRRR strategy outlines a structured approach that comprises several essential steps: Buy : Identify properties with high potential for appreciation and cash flow. Acquire these properties at a favorable price, often through distressed sales, auctions, or off-market deals. Rehab: Increase the property’s value through strategi...
Read more

How To Pick the Right SBA Loans

This Small Business Administration is designed to help companies with fewer than five hundred employees stay in business and help the economy thrive. While you can find informational resources through this administration, most people are more familiar with the financial help the SBA offers. SBA loans are divided into a couple of different programs, each with specific goals. The two most familiar are the 7(a), or general business loan, and the CDC/504, or real estate loan, and choosing the right one for your business needs can be the best way to grow and thrive. What Is the CDC/504 Program? The major differences between the SBA loan programs are how you can use the funds from each one. With the CDC/504 program, you can purchase equipment and owner-occupied commercial property with the help of a Certified Development Company. These are typically larger amount loans than other SBA programs, from $125,000 and $2 million with a ten percent down payment, and cannot be used for working capita...
Read more