There are many types of tax deductions out there that you might not even know about.
As a small business owner, you are always looking for ways to save money for your company. It is important to be aware of all possible tax deductions that are available to you. Few realizations are harsher than realizing you could have written off a purchase that would have saved you money. There are many types of tax deductions out there that you might not even know about. Here are some purchases that you did not realize were tax deductible.
Your Home
If you are running your own business out of your house, you can write off your home on your taxes. The room must be used exclusively as your office, and you need to spend the majority of your time conducting business activities in that office. According to the IRS, you could deduct $5 per square foot of your home that qualifies, with a maximum of 300 square feet.
Your Car
If you use your own car for business trips, you can deduct those trips from your taxes. In fact, if you have another vehicle solely for business, you can deduct the whole thing from your taxes. Make sure you keep track of your mileage so you can claim reimbursement on your taxes as well.
Childcare Expenses
You may be able to deduct childcare expenses if you hire a babysitter or daycare provider to care for your child while running your business. Make sure to include the name and tax ID number of the person or organization providing the care and the address of where the care was provided. You may also be required to report the telephone number of the care provider. This is technically not a deduction, but you do not have to itemize your deductions to receive the credit.
Education Costs
You can deduct education costs if it adds value to your business or increases your knowledge and expertise. This deduction includes seminars, webinars, classes, books, workshops, and even the transportation costs to get to and from the class.
Unusual Business Expenses
Depending on the type of business you run, you may have some unique expenses that can be tax deductible. For instance, if you run a dance studio, you could deduct the cost of props for dance performances. If something is used to benefit your business and document the reasons for it, you generally can deduct it from your business income. Therefore, it is good practice to keep track of all purchases made for your business, regardless of how unusual they seem.
Contact Bowman & Company Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services aim at decreasing your taxes and increasing your net worth through responsible, timely, and accurate recordkeeping. We offer our services to clients throughout the Washington, D.C. metropolitan area including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.