Having tax write-offs is a great way to save your business money. Here's a list of some tax write-offs that you may be entitled to this tax season.
The Home Office
If you operate your business from home, you are entitled to a home office deduction. Whether you own your workspace or rent, you can take advantage of this tax deduction. Your workspace is considered an expense. However, a home office deduction is a complex one, and you may have to defend it under an IRS audit. You need to take accurate measurements of your workspace and submit this to the IRS. In addition to the workspace itself, you can also deduct mortgage interest, homeowners insurance, repairs, and depreciation. For example, if your workspace takes up 20% of your home, your electric bill is 20% tax-deductible.
Phone Bills and Internet
You can use the business portion of your internet expenses, fax expenses, and phone expenses. Just keep in mind that you can only deduct expenses that are directly related to a business, so be sure to keep detailed use records. One phone line should not be deducted from all of its monthly costs. This is because it likely includes personal and business calls.
Health Insurance Costs
When it comes to health insurance premiums, you can deduct these if you are self-employed. You can deduct your long-term health care insurance premiums, dental insurance premiums, and overall health care insurance premiums. In addition, you can deduct health care insurance premiums for your spouse and any dependents under the age of 27 that you paid for.
If you are entertaining a client, attending a business conference, or traveling for business, you can use a meal as a business tax write-off. This write-off has been amended. You can now deduct 100% of business-related meals, as long as the meal or the beverage is provided by a restaurant. Just be sure to keep your receipts.
To claim travel as a tax deduction, the travel must take longer than the typical workday. It must also require you to get rest. Keep in mind that if you're handing out business cards at a bachelor's party in Sin City, this is not a tax deduction. You must be engaged in direct business activity, such as finding new clients, meeting up with a new client, or learning new skills for business. Travel expenses include transportation to and from your destination, rental car costs, taxi costs, and meals. Just don't go too extravagant because travel expenses typically come under scrutiny with the IRS. Be sure to maintain accurate records of all your travel expenses related to business. Your travel expenses are a 100% write-off.
Using your car for business is a tax deduction. But you must keep good records of the purpose of the trip, the mileage used and the date of the usage. The IRS has a standard mileage rate for this period. Using their standard mileage rate is the easiest way to do this. Car usage tax deductions include oil changes, repairs, depreciation, registration fees, and costs of vehicle insurance.
Education expenses that are directly related to your line of business are tax write-offs. Education to either improve or maintain your current skills is tax deductions. For example, paralegals and real estate agents are often required to take continuing education courses.
Knowing all of your tax write-offs for your business is complicated. Implementing them is even more complicated. If you are unsure about what your tax write-offs are or how to implement them, contact a financial expert or a tax professional. The bottom line is that tax write-offs can save you money. Be sure to take advantage of all of them.