The more tax deductions you make use of, the more money you will save. When small businesses partner with a CPA, they’ll be made aware of every write-off they could use. Most often, it’s small business owners who choose to do their own taxes that miss out on extra cash. Today, we’ll share some overlooked tax deductions we think more business owners should avail themselves of.
Today, we’ll share some overlooked tax deductions that more small business owners should avail themselves of.
Home Office Deduction
Let’s start with the most relevant tax write-off these days: the home office deduction. The IRS recognizes the importance of having a dedicated space from which to telecommute. As such, they may allow small business owners and employees to deduct certain expenses meant to improve their work-from-home life. Eligible expenses include everything from office furniture to refinishing your floors.
Keep in mind that, in order to make use of this write-off, you’ll need to have a space dedicated exclusively to teleworking. So if you work in your dining room, living room, or bedroom, it won’t cut it.
Business Mileage
The business mileage tax deduction is at once one of the most familiar and most misunderstood. The reimbursements are nothing to scoff at. Calculating it is simple. Simply multiply the IRS standard mileage rate (in 2021, 56 cents per mile) by the miles you have driven for business use.
If this sounds too good to be true, it’s probably because commuting miles do not count. But it does include the miles you drive to meet a client, to an airport for business, and so forth. If your profession frequently requires you to make similar business-related trips, you should start keeping track of your mileage.
Education-Related Expenses
As you well know, learning doesn’t stop when you get your degree. No matter what profession or field you may be in, there’s always a whole lot more to learn. Thankfully, small business owners and employees can utilize a tax deduction for education-related expenses.
So what qualifies as an educational expense? In short, just about anything that boosts knowledge relevant to your profession. You can use it for books, courses, exams, and a whole lot more.
When you use this tax deduction, you aren’t just saving money. You’re making an investment in your own knowledge and the success of your career.
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.