Around 99.9% of businesses in the US are considered small businesses.
One of the challenges of running a small business is dealing with taxes. You’ll need to pay these out of the profits your business makes, and it’s important to work these out correctly. There are several types of expenses that you can write off to help save you money during tax season.
For a rundown of some common small business expenses that you can write off today, keep reading.
Small businesses can make a deduction of 50% from certain meals. A meal qualifies if it’s business-related, and it needs to be documented. Make sure you keep details of the date and location, the cost, and the business relationship of whomever you dined with.
To make this easier you should keep all meal receipts, and make a note on the back of each with the relevant details.
Depending on how much you travel for work, this can be one of the best tax deductions available. It covers flights, car rental, hotels, tips, meals, dry cleaning, and more.
For a trip to be valid as a deductable, it has to be necessary for your business and must take you away from the city/area your business operates in. It’s also only valid if you’re away for more than a single working day, and you need to rest or sleep on route.
A small business owner should always have insurance to cover the business in case of an emergency. You can deduct the entire cost of your business insurance.
If you use your home to help run your business in any way, you can even deduct your home or renter’s insurance as a home office write-off.
Home Office Expenses
If you run a home-based small business, or if you’re a freelancer, you can make a partial deduction for the area of your home used for your business. This is an amount of $5 per square foot that you can use up to a total of 300 square feet.
You can only do this if the area is used exclusively for business and you use it regularly. If it has any other usage (such as working at a dining table) it’s not valid as a deductible.
Business ownership involves making sure you have any supplies you need. For an office-based business, this often includes things like stationery, computers, printers, software, and more. You can even deduct work-related shipping costs.
Like work-related meals, you should keep all receipts as a record. If you want an easier way to track such expenses, you should use spend management software.
Phone and Internet
Many businesses these days require phones and the internet to run. If this is the case for your business, you can deduct the cost of these.
Businesses that use them exclusively for work can deduct the entire cost, but if you also use them outside of work you can only deduct 50% of the yearly cost.
Is It Worth Writing Off Small Business Expenses?
How much all of these small business expenses cost varies between different businesses. In many cases, they’re often quite small amounts, but when adding everything up it can come to quite a large sum. Tracking your expenses can make it much easier to get the most out of your tax deductions, helping you save a good amount of money.
For more business articles check out some of our other blog posts.