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4 Types of Tax Deductions Your Small Business Can Claim

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Tax is one thing we cannot get away from in life, whether it is on a personal or business level. But while personal tax is one matter, business-related tax is another. The latter can be a bit complex and downright confusing. It can be all the more complicated when you own and run a small business, where you’re required to prepare and file taxes for compliance purposes. But did you know that there are practical ways to reduce your taxes?

In this article, we will share four types of tax deductions your small business can claim:

Home office

Did you know that you can have tax deductions for your home office? Unfortunately, some small business owners are afraid of doing so due to the fear of going through an audit. Keep in mind that this fear shouldn’t stop you from claiming legitimate deductions. As long as you’re running your startup clean, there’s nothing to worry about. Just be sure to file and organize your tax records to take advantage of this benefit. Finally, ensure that your office is apart from your living space and you have only one computer at your home office.

Travel costs

It’s common for small business owners to travel regularly for business purposes. What’s good about business-related taxes is that their expenses are tax-deductible, including your airfare, hotel fees, car rental, and travel expenses such as laundry costs. Even food expenses involved in traveling can be deducted, although this will only be up to 50 percent. Just be sure to keep receipts and records showing the reason for purchases so that you can file these to the IRS as tax reimbursements!

Technology purchase

We can no longer deny the need for tools and technology in today’s business landscape. As a small business, it’s imperative to invest in some of these technologies, such as computers, printers, fax machines, software, and even business vehicles. The good news is that equipment expenses are considered tax-deductible under Section 179 of the tax code. That said, be sure to check this provision and see what types of technology you can file for tax deductions.

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Car donation

When it comes to getting rid of your business vehicle, you have the option to junk it or find a buyer who might be interested in it. However, there’s one excellent choice you can resort to—that is to donate your car. Aside from the ease of disposal and the opportunity to help others, there’s one benefit you can get by doing so. As with those above, you can claim a tax deduction by donating your car correctly and filing for this when applicable!

At FiBrick, we’re specialized in accounting and bookkeeping, tax planning and compliance, as well as fractional Chief Financial Officer (CFO) and advisory. Our tax planning strategies include comprehensive business compliance and return preparation services. If you need a tax specialist to deal with the deductions of your small business, we’ve got you covered!

Conclusion

At this point, we’ve covered four types of tax deductions your small business can claim—home office, technology purchase, travel cost, and car donation. Be sure to consider all these options to see how you can reduce your small business taxes. Most importantly, work with a highly reliable tax professional or small business accountant so that you can save money on your taxes while finding ways to grow your small business!

Are you looking to hire an accountant to handle the taxes of your small business? We’ve got you covered! As an accounting company in New York, NY, we cater to startup companies and small businesses looking to grow their finances and deal with their taxes. Get in touch with us today to schedule an appointment!

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