If you run a small business, you know that every dollar really does count.
Whether you’re just getting off the ground or your business has an established track record, it’s still helpful to save money whenever possible.
Tax deductions are one area where a little knowledge can go a long way. The more breaks you’re aware of, the more opportunities you’ll see for your business to save money.
To give you an idea of what types of savings are available, let’s go over some of the most commonly overlooked small business tax deductions:
Bad Debts
One of the biggest surprises many new business owners have is just how hard it can be to collect money from certain clients or customers. This issue is especially prevalent among service businesses.
Even though it’s very frustrating to have clients who simply won’t pay what they owe you, the silver lining is bad debts can generally be deducted when you file for your business.
Mileage
Whether it’s driving to a meeting, attending a networking event or going to see a client, you’re allowed to deduct mileage that’s used for work purposes.
Just be sure that whenever you want to deduct mileage, you log the date and where you’re going, as well as the mileage at the beginning and end of your trip.
Charitable Donations
You may already be aware that eligible donations you make to charity can be deducted.
But what plenty of business owners don’t realize is it’s often more advantageous to make deductible donations through their business than from their personal money.
Cloud-Based Software
More and more software is moving to the Cloud.
The main advantage for customers is it allows them to access their software from any computer with an Internet connection. And one of the primary advantages for software developers is whenever there’s a bug, they can instantly push out a fix.
Because they provide ongoing service, many cloud software developers charge on a monthly basis. If you have one or more cloud software subscriptions, be sure to deduct all your monthly charges.
Business Trip Incidentals
Landline calls, lodging taxes, cleaning and laundry are all examples of acceptable incidentals from business trips that you can deduct.
And as long as you keep a log, you can also deduct train, subway, bus and taxi fares.
Loan Interest
If you borrow money against a personal loan like your mortgage in order to buy equipment for your business, you can deduct the interest on your loan.
The two most important things to remember about this break are that you need to use the money for your business, and you also need to document exactly how you used it.
As you can see, there are plenty of tax deductions available for small businesses. The key is keeping track of all of them.
By making it a priority to keep current and detailed records throughout the entire year, you’ll be able to maximize your deductions when the time comes to actually file your taxes.
Photo credit: American.com
About the Author: Jesse Galt is a freelancer who writes about a wide range of topics, including mobile credit card processing and small business marketing strategies.
