Running a small business isn’t cheap. As the saying goes: “It takes money to make money.” And that’s especially sure for the small business owner. I’m here to tell you about some of the money you may be spending this year that you can use for deductions at tax time that may lower the amount of tax your business owes. Keep in mind the tax laws change all the time, and you may not be entitled to deduct the same things this year that you could last year. Make sure that you have an accountant, tax advisor, or financial consultant for your small business you can have looking over your tax prep in order to keep everything in check!
Technology: Depending on your business, the list of supplies, tool, and equipment you purchase to help run your business may be long. Computers, smartphones, POS systems, refrigeration, IT support, and more costs associated with technology can all possibly be a deduction on your taxes, even including technology training for your staff. Laws in your area along with tax strategies may change you claiming them all at one time or spread over multiple years. This is a good one to consult with a profession on, to make sure you’ve claimed the appropriate things at the appropriate times.
Supplies, furniture, inventory, travel: these are all essential to your business and most can be used to help reduce your tax liability. Desks, cubicles, marketing supplies, even pens are all part of running your business and as such may be written off come tax time. Inventory in stock, parts for items you assemble, and shipping costs are all potentially eligible costs. Travel for sales staff going to make presentations, reimbursement for managers travelling to training, meetings with vendors, conventions and tradeshow travel, hotel rooms, tickets to the convention or tradeshow, per diem for employees travelling, car rental fees, and more travel expenses are all potentially written-off where eligible.
Salary: Quite often the biggest cost for any business is the staff. With wages, salaries, benefits, training and more costs piling up, it’s good to know that this may be your most important area for deduction. Fees paid to contractors, bonuses, tuition for education plans or training related to work, all of these may be able to be used as deductions. Also track fees for your lawyers, graphic designers, contractors, consultants, and, yes, your accountant. These fees may be deductible from your taxes as well.
Startup costs and offices: Even if you work from a home office, you may be able to deduct many of the costs associated with an office space. Definitely look closely into your tax requirements here, because rent or mortgage on an office space, even furnishings and upgrades might be deductibles. Also the one-time fees for licences, registration, advertising, orientation for staff before opening, and other startup pre-opening costs may be deducted here. Again, since these can be considered long-term investments, look into if it is more valuable to deduct the full amount in one year, or smaller amounts over time.
