When you operate a business, whether a startup or an established company, you may overlook potential deductions that can save you money during tax time. As a business owner, you are probably familiar with some commonly used deductions, but other lesser-known deductions can reduce your tax bill even more. Continue reading for some of the commonly overlooked tax deductions for businesses.
You may be able to deduct the cost of educational training and workshops related to your industry or the skills you require while operating your business. Many times, you can also write off conferences, online classes, books, mastermind groups, lectures, and reference materials. For education expenses to be considered a tax deduction, they must connect to your business. Therefore, dog grooming classes won’t be eligible if you run a flower business. You can keep track of your professional education expenses by paying using your business account, just like other business expenses.
Local Travel Expenses
Even if your business does not have a vehicle, you can still get deductions for transportation costs such as using public transportation, ride-sharing services, or taxis. When writing off your travel expenses, you should follow the same rules used for writing off your business mileage. Remember that local travel expenses can only be legitimate tax write-offs if you travel for business outside of your workplace, not commuting to work or going to your business premises. If the principal place of business is your home office, then all local business-related travels may be deductible.
Parking and Tolls
Parking may not seem like it would add a significant tax deduction. However, when you incorporate highway tolls and a year’s worth of feeding meters, you might discover that you spend a great deal on parking and similar fees. You can write off business tolls and parking just as you would write off business mileage. Remember that you cannot write off parking in your primary business premises or tolls incurred while traveling to your workplace. However, parking is deductible if you are parking anywhere else, including the airport, as you travel for work.
Cell Phone Bill
Although cellphone bills are continuously rising, many business owners tend to overlook this excellent tax deduction. This is mainly because most of them do not know how they can write it off. To write off any cell phone bill, you must determine how much you use it for personal purposes versus business reasons. When using your phone, you look at more than just making calls; you also use your phone to check emails, text clients, and post on your social media accounts. The percentage of time you utilize your phone for business is the only deductible portion of your bill.
If you usually have working lunches, whether take-out or dine-in, you can deduct 50% of the meal expenses. If you meet business contacts, employees, and partners, consider meeting them over lunch. These meal expenses can save you lots of cash when you claim deductions for the whole year.
Finding ways to make your taxes work for you and not against you is a crucial step in your business’ success. By taking advantage of tax deductions, you can lower your liabilities and keep more of your hard-earned profits. However, for you to benefit from these tax deductions, you need meticulous record-keeping as it will help you quickly calculate the costs and prove their accuracy in the event of an audit. Ensure that you hire a seasoned tax professional to help you take advantage of these and many more tax deductions your business may be eligible for.