Alana Griffin, EA, MST & Brandon Griffin, EA


Accounting, Bookkeeping, and Tax Info for Creatives, Solopreneurs, and Small Business Owners.

9 Tax Deductions Your Small Business May Be Missing

9 Tax Deductions | Best Tax Services

As a small business owner, there are many costs that come with running a business. Most costs you can claim, such as staff wages, marketing, and business finance costs. However, you must keep an accurate record to support your claims. Many small business owners aren’t aware of the diversity of deductions they are able to claim, therefore, they aren’t taking advantage of lowering their overall taxable income.

Although there are a variety of deductions small businesses can claim, there are however limits and restrictions. Therefore, it’s important to consult a tax professional to help you navigate the necessary paperwork and advise you on which tax deductions your small business can claim to avoid being audited by the Internal Revenue Service (IRS). In the case that you are chosen to be audited by the IRS, a tax professional will be your best defense to ensure that the claims you provided are accurate and given the IRS will need to verify your reported tax report. There are tax deductions your small business may be missing and we’ve compiled the 9 most common.

9 Tax Deductions Your Small Business May Be Missing

1. Start-Up Costs

The IRS says that start-up costs are “amount paid or incurred for (1) creating an active trade or business, or (2) investigation the creation or acquisition of an active trade or business.” There are a set of deductions that your small business can claim in your first year in business, while other costs are to be spread out over several years. This is due to your start-up costs being considered as capital expenditures, investments, and are for the long-term success of your business.

2. Equipment, Reference Materials, Computer Hardware, and Software

As a small business owner, purchasing necessary equipment, reference materials, computer hardware, and software is something that is expected to come with running a business. The IRS allows individuals to claim items for up to $2500 but can only be claimed for the business use of your computer, hardware, and software.

3. Home Office, Supplies and Materials

Many small business owners, operate out of their home of which some are eligible to claim their home office as a deduction. Again, there are limits and regulations to this and further you are only able to claim certain expenses such as phone bills, internet, etc. that are used in a specific area of your home and used for business. In addition, office supplies and materials are also deductible, such as staplers, pens, etc.

4. Advertising and Marketing Expenses

However, your business brings in new customers and continues to keep recurring clients, from advertising to promotions these can be deducted as well.

5. Business Travel and Meal Expenses

Although entertainment expenses have since been eliminated during the 2017 tax law changes, business travel and meals are still deductible, however, meals are subject to the 50-percent and must be for valid business purposes.

6. Personal Vehicle for Business Use

If you use your car or truck for business purposes you can write off a portion of the vehicle usage through either deducting your actual costs or by deducting business mileage, the standard mileage rate changes from year to year, check the IRS Standard Mileage Rate [LINK] to ensure you file the correct amount of mileage allowed.

7. Legal and Professional Fees

Hiring a tax professional to help plan and prepare your taxes is deductible. In addition to fees for tax professionals, small business owners are eligible to claim is the expense for lawyers and other business advisors. Professional fees include but are not limited to training and organization membership fees.

8. Insurance Expenses

Insurance expenses include health, individual and for employees, business and business equipment are deductible from your tax return.

9. Charitable Donations
In order to qualify as a charitable donation, the charity and organization must be qualified through the IRS. To search by organization name or Employer Identification Number (EIN) and others, visit this [LINK]. Some of which deductibles that your business can apply are cash contributions and gifts of property or equipment, however, you cannot deduct the value of your time serving as a volunteer for an organization.

Lauren TamayoComment