As most business owners are aware, tax season is right around the corner. While you still have about a month to complete your taxes, it’s time to look for some write-offs you might not know you had. In addition to securing a Newtown Small Business Insurance policy to protect your operations, take advantage of the following deductions.
It’s more common than ever for business owners to operate out of their homes, even if it’s just a few days a week. Many people believe this is a guaranteed invite for the IRS to audit you. However, this is not the case. The key is to dedicate a portion of the room or an entire room to solely working. This means that your office cannot double as a family game room and the kids can’t use the computer regularly for homework, games, chatting, etc.
So, how much of your space is tax deductible? Bankrate says to measure your work area and divide by the square footage of your home- that percentage is the fraction of your home-related business expenses — rent, mortgage, insurance, electricity, etc. — that you can claim.
Paper, pens, folders, etc. are all necessary for your home office. Keep the receipts to these items to deduct them at the end of the year. This includes office furniture, as well!
Subscriptions and Software
Sections 179 now allows business owners to deduct the full cost of software and work-related subscriptions at the end of the year, so keep track of all of these purchases.
If you commute for business, it is important to track the miles you drive, including gas, insurance premiums, tolls, parking fees, repairs and the reason for your trips to show Uncle Sam come tax season. Add them all up and multiply by .54 cents per mile to get your deduction.
Travel, Meals & Gifts
If part of your business is to schmooze with clients, then take advantage of the write-offs. 100% of flights and hotel accommodations, including on-the-road expenses such as gas and rental cars are deductible. However, only 50% of meals are tax deductible, so bear that in mind when dining out with clients. Further, a gift to a client is also fully deductible.
At GMG Insurance Agency, we work hard to insure businesses like yours. Our dedication to customer service and providing affordable rates has allowed us to serve the needs of Pennsylvania residents for over 78 years. For more information on how we can protect you, contact us today at (855) 407-4450.