Is this Deductable? Your Small Business Tax Deduction Checklist

Your Small Business Tax Deduction Checklist

 Don’t leave the office without it!

As a Small Business owner you know the confusion that we all share when it comes to taxes.  I thought you might find this blog helpful, with the federal tax code containing more than 72,000 pages and growing, trying to figuring out what you can and can not claim as a deduction can be confusing at best. With the help of Randy Myers from Business on Main, here are some tips to help you minimize your tax bill without having the IRS knocking on your door. 

What can I claim as a deduction?

Meals and Travel -  Small Businesses can deduct 100 percent of business travel expenses, things like Airline tickets, Lodging, Travel, and other such expenses.  Many don't realize however that you can only deduct 50% of meals while on a business trip.  The confusion comes because you can take a 100% deduction on meals while you are traveling to and from a business destination. There are a few exceptions to the meal rules, best to see an accountant for the fine details.

Auto expenses - If you use a vehicle for your Small Business, you can take deductions including ordinary expenses related to maintenance and up keep, however it is necessary to keep a vehicle mileage log for miles, and gas receipts. The confusion here is that you cannot count traveling from home to your place of work.  

Office at Home - If you have an office in your home, either part time or full time, you can claim a tax deduction for a percentage of you home related expenses such as a percentage of your rent or mortgage and your utility bills.  It is best to consult a CPA for the specifics.

Gifts -  If you give gifts to customers they are tax deductible, but only up to $25 per client annually, so don't get crazy with it.

Internet, phone and cable - When used for business purposes each of these are all generally tax-deductible expenses when used at your place of business. If you are using them from your home office, they will have to be pro-rated.  You can claim the percentage that involve business use.

Work Opportunity Credit - There is a range from $2,400 to $9,600, that is available for every employee your business hires that are from specific groups that the government identifies as having historically faced road blocks to employment. They include military veterans, with a disability or financial-aid criteria, ex-felons, and people who have been receiving various forms of federal financial assistance.

Benefits - Often a business owner can claim a tax deduction for some benefits provided to their employees, like group term life insurance, parking and mass transit or van-pooling services, according to Mike Scholz, a partner in the Tax and Business Services group at Wegner CPAs in Madison, Wisconsin.

Retirement packages -  Many Small Business owners never bother to create retirement plans, in doing so they give up valuable tax breaks for their companies.

I hope this checklist was helpful to you.  Thanks to Randy Myers from Business on Main for his articles input.

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Helpful article by Randy Myers from; Business on Main