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Helping Your Business Discover the Right Tax Deductions

Deductions are important for small businesses. Learn what expenses you can deduct to make your tax experience easier.
Carol Evenson Jan 31, 2020
Running a small business can prove to be difficult now and again. In order for you to see success and provide exceptional services for your customers, you need to have a firm understanding of how to keep your company safe.
When tax time comes around, for example, you might be curious about your deductions. Many small business owners struggle to know exactly what they should focus on when you’re looking to make the most of the experience. Knowing what deductions you are eligible for can make a positive difference to how your business weathers the coming year.
Take a moment to explore these common deductions and determine whether or not you are eligible for each. A little research will show you how you might be able to save a nice chunk of change on your taxes.

Home Office

A number of small businesses are so small in size that owners do not require dedicated spaces outside of the home to maintain operations. What plenty of people overlook, however, is that a home office is a worthwhile deduction when tax time comes around.
The IRS allows business owners to deduct $5 for each square foot that comprises a home office up to a limit of 300 square feet. Being exact is important when listing the footage, so be sure to use a tape measure to know what to fill out on the form.
While this can definitely be an appealing benefit, there are also restrictions. The IRS has very strict guidelines on what qualifies as an office. If you have a room that is used as an office and as a home gym for the family, then you technically are not able to deduct it. The space has to be exclusively used for business, so keep this in mind.

Consider Capital Gains and Losses

It is also a good idea to understand when you are able to deduct factors like sales or capital assets while completing your taxes. This can be tricky, and requires comprehensive research of the laws and guidelines dictating high-value assets.
You will also need to have the correct documents available to you. Form 8949 is the appropriate form required when you are looking to report capital gains and losses from investments related to running your business. Look into the details to determine whether or not this is an applicable deduction for your company.

Marketing Expenses

Promoting your business can often feel like an endless struggle. From email campaigns to printing countless business cards, marketing can be an expensive beast to try and tackle. Of course, marketing expenses can also be useful at tax time.
The IRS allows small businesses to deduct 100% of the costs associated with promoting a business. This even includes digital tactics like purchasing ad space or using SEO services to make improvements to your company website. Keep track of how much you spend each quarter to have an exact number ready for tax time.

Supplies

To keep yourself organized while maintaining your business, you likely have spent a good amount of money on supplies. Pens, pencils, notebooks, printer cartridges, and staplers are all common items found in small businesses. What’s exciting is that all of these supplies can be completely deducted during tax time.
While traditional office supplies are best to deduct outright, more modern investments like phones and laptops can be handled in various ways. A deduction is one option, but you also might want to consider depreciation as a way of getting more back over the years from your purchase.

Meals and Entertainment

In the past, it was possible to deduct all of the expenses related to obtaining new clients. Recent years have seen stricter regulations dominate this. Entertainment is no longer deductible, which means you’ll be paying for that out of your own pocket. Dining, however, can be deducted for up to 50% of the total cost of the meal.
Deductions are important for small businesses. Learn what expenses you can deduct to make your tax experience easier.