Every small business owner wants to maximize credit— and there is only one way- by reducing tax.
Small businesses are privately owned corporations, partnership or sole proprietor that has fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as “small” in terms of being able to apply for government support and qualify for preferential tax policy varies depending on the country and industry.
Small business ownercan take advantage of all the small business tax deductions that are available and appropriate for business.
Every penny counts when you’re running a small business; your tax liability is no different. Tax deductions can lower bill by hundreds or even thousands, if it can properly account for the relevant expenses. Instead of sending money to the government, it could be channeling it back intobusiness. Also, it is important that proper handling and maintaining of all tax complianceis done time to time.
Following are some of the tax deductions that a small business owner can take-
Most small businesses use a vehicle, such as a car, light truck or van. The cost of operating the vehicle for business is deductible only if there are required records to prove business usage.
Payments to employees, including salaries, wages, bonuses, commissions, and taxable fringe benefits, are deductible business expenses for the business.For employee benefit programs, such as retirement plan contributions. Read more about payroll outsourcing services .
Many small businesses use freelancers or independent contractors to meet their labor needs. The cost of such contract labor is deductible.
This deduction is allow for the cost of buying property for business, for example furniture, equipment etc.
The cost of renting space — an office, boutique, storefront, factory, or other type of facility — is fully deductible.
They are fully deductible.
If any employee or owner himself travels out of town on business, the cost of transportation (e.g., airfare) and accommodation is fully deductible.
Legal and accounting fees are fully deductible.
Electricity expense is fully deductible. Other utility costs include mobile phone charges, water charges, meal expenses etc.
In some instances, depending on the type of company, charitable donations are deductable. In case company is a Partnership, or Limited Liability Company they can deduct as cash donations.
Owner can take software deduction if he uses the same in his business.
Postage charges are also deductable.
If owner published any information related to his business in any of the magazine, these expenses are fully deductable (like mission, vision,)
If owner wants to register his business on any website, then website fees are deductable.
The insurance premiums paid for coverage on business is all tax-deductible. To qualify, your insurance must provide coverage that is “ordinary and necessary.” This could include coverage for:
As a general rule, any personal expenses are not deductible incurred in the course of doing business. Expenses that are not reasonable or necessary for doing business are also not deductible.
Source: Aristotle