9 Tax Deductions Small Businesses Can Claim on Their Tax Return

82% of businesses fail because they have cash flow problems. 29% of small businesses fail because they ran out of cash.

Owning a business isn’t for the faint of heart. It takes hard work, determination, and of course, money.

Paying taxes as a small business owner is always stressful. But it doesn’t have to be impossible.

There are ways to help you save money. One way is to find as many tax deductions for your business that you possibly can.

Of course, knowing where to look is half the battle. To help you out, here are nine tax deductions small businesses can claim on their tax return.

1. Tax Deductions Small Businesses Can Use Like Auto Expenses

Good news! If you use your automobile for business purpose, you can claim some of the mileage and costs of keeping it road-ready as a tax deduction.

There are two ways to claim expenses. You can claim actual expenses meaning you track and deduct all actual business-related expenses.

Don’t forget to deduct for depreciation each year.

The second method is a standard mileage rate method. This lets you deduct a standard amount for each mile driven, plus all tolls and parking fees related to business.

2. Insurance

Certain types of insurance are tax deductions small business owners.

Insurance such as medical insurance for employees is deductible. So is fire, theft, and flood insurance for your business property.

Credit insurance, covering losses from any business debt is deductible. Insurance like liability, professional malpractice, and even worker’s comp is tax deductible.

You can also deduct unemployment insurance contributions and business interruption insurance.

3. Professional Fees

No one can run a business on their own successfully. You’ll need help.

Luckily, that help translates into tax write-offs for small business owners. Fees you pay to your attorneys or consultants are deductible.

Even the fees you pay for your tax return are deductible.

4. Expenses From Starting Your Business

It takes money to start and operate a business. From the start, you should create a list of small business tax deductions so you don’t miss any.

Expenses for advertising, office supplies, utilities, and even repairs are deductible as current business expenses after you open your doors.

5. Travel

When you travel for business, you can deduct much of the expenses for the trip.

You can take business tax deductions for the plane fare, car rentals, taxis, lodging, meals, phone calls, and even tips.

6. Marketing & Advertising

Make a list of small business tax deductions for all your marketing and advertising efforts.

Your website, PPC, brochures, business cards, and sponsorships are all deductible.

7. Interest

Some owners use credit to finance their business purchases.

Both the interest and carrying charges are fully tax deductible. It’s even true if you take out a personal loan and then use that money for your business.

Just keep good records.

8. Charitable Contributions

Charitable contributions are allowed as tax write-offs for small business owners. But only if your business is a partnership, LLC, or an S corporation.

You can even donate items like old computers and office furniture to a school or nonprofit and receive a tax benefit. But only if the equipment hasn’t been fully depreciated yet.

9. Education

Any classes, books, or seminars you take to further your education is tax deductible. However, it doesn’t count if you are taking courses to change your career in a significant way.

Keep Learning

The tax deductions small businesses can take are usually pretty straightforward. But it’s up to you to keep learning what is and what isn’t deductible.

We can help. Keep coming back to read our blog to learn more.

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