Top Small Business Tax Write-Offs

Maximizing your small business tax write-offs is a year-long process. While it involves meticulous record keeping and a moderately high level of organization, the end result is worth the work put in. The key, though, to getting the best break is recognizing tax write-offs for your small business in the first place. Here are a few of the top write-offs that your business should be taking advantage of.

Car Deductions

This is one example of a deduction that requires in-depth record keeping. Keep receipts for parking, tolls and gas as well as a detailed log of your trips' mileage from start to finish. While it is possible to claim a standard mileage deduction, properly updated logs can result in much larger deductions. 

Start-Up Cost Deductions

Start-up costs can add up, especially if this is the first business you’ve started. Some of these expenses include researching, training employees, marketing and even legal help that you obtain to establish your business. For start-up fees, you can deduct up to $5,000, which should be documented and logged carefully. Another $5,000 may also be deducted for organizational costs you may incur.

Office Equipment Deductions

While the actual property cannot be deducted, you can include many items used such as computers, phones, Internet service, furniture and other equipment necessary to run an office. It is extremely important to recognize the equipment that is being used solely for the purpose of work and that used for personal reasons as well. You can deduct Internet service if you are using it for business more than 50 percent of the time. Keeping receipts and logging usage of phones and computers can help you fill out the proper paperwork when tax time comes around. Note that printers and fax machines can be deducted; however, you must depreciate those expenses.

Travel Deductions

Traveling for business can be extremely expensive and certainly adds up over time. Thankfully, these expenses can be deducted with the proper documentation. Hotel bills, transportation and half of business meals can be included. This applies to you as well as to any employees or individuals who are involved with your business in a professional manner. While you can bring your family on a business trip with you, their costs are not deductible. The opportunity to make travel deductions has been abused, and therefore, such deductions can attract more attention. For that reason, it is extremely important to keep thorough records detailing trips with bills and receipts included.

Education Deductions

Education deductions can be strict, so it is important to familiarize yourself with Publication 970 before signing up for any courses. You can typically deduct classes that help to further your education in your current position or field or classes that help you acquire the skills you may need for your specific job. Classes that educate or prepare you for a different field, however, do not qualify for a tax deduction.

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