As discussed in part one of this piece, there is a vast and confusingly diverse array of tax deductions that small businesses may be entitled to, and discovering the ones that you might be able to take advantage of, can be extremely time consuming and confusing.
This list of deductions is designed to help you understand which ones you might be entitled to, but of course, you should always check with a tax professional if you’re unsure about any of them:
Employee benefits:
If you keep track of all the contributions you make towards your employee’s health plans, life insurance and education reimbursement programs to name but a few, you may find out that most (if not all) of them are tax deductible.
Business software:
Instead of depreciating the cost of business software as was previously the case, you can now deduct it as part of your small business deductions. This even includes your POS software and any other software that you use to help run your company.
Rent:
If you pay rent for your business premises, be sure to include it in your list of deductions.
The cost of starting your business:
It’s possible that you may be able to deduct up to $5,000 in start-up costs and expenses that you might have racked up when you first opened your doors for business. Included are marketing and advertising costs, travel and employee training.
Utilities:
Any electricity that you use for your business, or mobile phone bills may be deductible, but if you use the home office deduction, check that your landline is dedicated to your business before you’re able to deduct it.
Travel expenses:
If you’re travelling to a trade show, for example, you can take a small business deduction for every related expense, from airfares and hotels to meals on the road and auto expenses.
Taxes:
While this is not always straightforward, it’s worth talking to a tax expert about deducting licenses and fees, taxes on real estate and sales tax to name but a few.
Commissions:
Many companies employ salespeople who work on a commission basis, and these payments are tax deductible. You may also be able to take a small business tax deduction for third-party commissions, such as those whom you may pay as part of an affiliate marketing set-up.
Renting equipment and machinery:
Renting equipment or machinery may be of benefit to your business if you can deduct them as expenses during the year they occur in, with no depreciation.
Interest on loans:
Personal loans that are funnelled into your business may be tricky to process as part of a deduction, but if you take out a business line of credit, then the interest that you pay on it is entirely tax deductible.
Bad business debts:
If you have ever given an employee or vendor an advance on their money, only to not receive repayment or the goods or service that you thought you’d been contracted for, you may be able to treat this debt as a small business deduction.
For the entire list of deductible items for small businesses, speak to a trusted, local tax professional about what may or may not apply to you and your businesses circumstances. This list is certainly not exhaustive, and while it may take a little effort to go through them all, it could prove beneficial in the long term.