No matter the shape or size of your company, you are likely to be eligible for business tax deductions. The US tax code is designed to help entrepreneurs and employers by reducing the tax burden on them wherever possible. This is why hundreds of deductions are available to businesses to help offset expenses or recruitment costs. Despite this, 30 million Americans miss out on deductions that they are entitled to every single year.
Oftentimes, they are simply not aware of the deductions available to them, especially if they are still learning how to do self-employed taxes. If you are wondering how you can save thousands on your next business tax bill, you have come to the right place. Follow these business tax tips to access the deductions you deserve.
1. Get Professional Help for Your Business Tax Deductions
First thing’s first, if you want to maximize your potential deductions, you need professional help. If you are new to self-employed taxes, you are unlikely to know the ins and outs of the IRS tax code and how you can work it to your advantage. That’s why you should consult experts in tax strategies, who can look at your business and apply for all of your deductions on your behalf. The amount you stand to save will likely far outweigh the initial cost of hiring them.
2. Advertising Deductions
Did you know that every penny you spend on advertising your business could be counted towards your tax deductions? When learning how to do business taxes, it is important to first note that you should be saving every receipt and record of your marketing costs. This includes whatever you have paid for Facebook ads, SEO work, and even business cards. All of it is deductible.
3. Business Startup Cost Deductions
When you know how to start a business, you quickly learn how expensive it is. Getting the right paperwork, consulting a lawyer, leasing an office space, and recruiting top talent all cost huge amounts of money. Fortunately, the IRS understands this, which is why it has made most of these routine costs fully tax-deductible, which could save you tens of thousands of dollars.
4. Payroll Deductions
For most businesses in America, the most significant expenditures are payroll costs. This includes the actual salaries of your employees, sure. The part that is tax-deductible is the other payroll stuff. Think workers’ comp, insurance, and any fees you pay to third-party payroll processing services. All of this can be subtracted from your tax bill.
5. Equipment Costs
One of the most straightforward business tax deductions that are easiest to report is equipment costs. A lot of your equipment tax deductions are calculated via the so-called “depreciation method“. Let’s walk through an example. Let’s say you purchase a $3000 computer for work and that you plan to use it for three years before it is time to buy a new one. This would work out as a $1000 depreciation per year, which is how much you can count towards your deductions on your annual tax bill. By being on the ball with this one, you can save huge amounts of money.
Top Tips for Ambitious Entrepreneurs
Understanding the business tax deductions available to you will allow you to boost your bottom line and have more left over to invest in growth. If you are looking for practical advice on how to grow your business, we have got you covered. Make sure to consult our expert Business column to learn more top tips for ambitious entrepreneurs in 2021 and beyond.