The Do’s and Don’ts of Tax Deductions for Small Businesses
Small business owners often struggle with their taxes when they’re just starting out. There are a lot of laws that you need to educate yourself on, and the last thing you want is an audit from the IRS.
The government offers small businesses many tax breaks and deductions—it’s up to you to take advantage of them. To help you get the most out of this tax season, here are some of the do’s and don’ts of tax deduction for small businesses.
Do claim “home office” deductions
If you’re conducting most or all of your business from home, there are a lot of deductions that you’re entitled to. For example, you can claim a portion of your rent or mortgage as a business expense,
Don’t mix your personal and work space
Keep a clear line between the space you use for business and the space where you conduct your personal life. If you use a computer for both business and personal reasons, then you won’t be able to deduct it.
Do claim travel expenses
When you travel for business, you can deduct all your travel expenses, and 50% of your dining expenses.
Don’t mix personal and professional expenses
If you’re mixing business with pleasure, that’s OK. Just make sure everything that you claim is strictly for business.
Do deduct technological expenses
The technological equipment you use for your business is tax deductible—even computer software.
Don’t forget to keep receipts and record all your expenses
Claiming every deduction that is legally possible can save you money, but if you don’t have documentation and receipts to back up every deduction, then you can find yourself in trouble with the IRS.
The more money you save through tax deductions, then the more money you can funnel back into your business to keep it growing!