Demystify Some of The Important Tax Deductions For Small Businesses

By April 25, 2022 No Comments

Important tax deductions for small businesses 

Every small business owner who has raced against time to file taxes or struggled with tax credits and deductions knows taxes are a complicated matter. Irrespective of the complexity, it is crucial to take out the time to leverage all the right deductions to save thousands of dollars each year. Accurate Tax & Bookkeeping, a tax preparation service, breaks down some tax deductions that small businesses must not miss out on. 

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  1. Educational expenses

Training and upgrading skills is a necessity for the growth of a business and sometimes it is a legal requirement for some businesses. The expenses borne by a small business to upgrade its employees’ skills and knowledge through seminars, workshops, and other means can be leveraged. These expenses that are directly related to a business are tax-deductible.

  1. Regulatory and licensing fees

Businesses that require state and local permits, licenses, and other regulatory documentation or practices are necessary business expenses that are tax-deductible. 

  1. Home office costs

Whether it is a stand-alone space or a home, small businesses operating out of either can take advantage of deductions such as rent, utility bills, insurance, and painting & repairs. However, businesses operating out of homes need to meet certain criteria as per the IRS documentation. One of the requirements is that the office space must be used exclusively for work only. Secondly, this space must be the primary place of business. 

  1. Wireless phone service bills

Cell phones are the main and popular means of communication for most businesses. While many businesses may invest in another phone number dedicated to business purposes, others may continue using their phones for business calls. Despite this overlap of business and personal usage, businesses can still deduct a portion of the cost on their business taxes.

  1. Petty cash purchases

Unplanned and minor expenses such as a few coffees for a morning meeting or an out-of-cycle purchase can slowly add up to substantial amounts over a year. Such purchases are often made using petty cash, traditionally stored in a till but now these expenses can be conveniently made using “petty cash” cards. These expenses are deductible if the receipts are saved.

  1. Professional & consultant expenses

Necessary expenses such as fees paid to lawyers, tax professionals, or consultants generally can be deducted in the year they are incurred. However, if the work relates to future years, the expenses must be deducted over the life of the benefit received from the lawyer or other professionals. 

  1. Automobile expenses 

Deductions on mileage and gas expenses are a well-known fact. However, many small business owners fail to deduct things like maintenance, registration, tolls, and parking fees. Keeping track of such related expenses incurred to travel for business can help in substantial deductions. 

A solid documentation system or diligently storing the receipts and saving transactional information of expenses can make tax preparation a breeze later in the year. Businesses can consult with tax preparation services such as Accurate Tax & Bookkeeping to determine what receipts and documentation are worth keeping.

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About ATBS

Accurate Tax & Bookkeeping Services specializes in handling financial needs for businesses of all sizes.

Greg J. Menia founded the tax preparation service company in 2010, having worked in business tax services since 1995. The team performs tax services for small businesses and large businesses alike, serving all areas around Tampa, FL. 

Call (813) 655-9702 today for “accountants near me” in Brandon, Florida. Alternatively, contact Greg and the team at Accurate Tax & Bookkeeping Services by emailing [email protected] or visiting the offices at 710 Oakfield Dr. Suite 159, Brandon, FL 33511.

Greg Menia

About Greg Menia