The 7 Most Common Tax Deductions

The 7 Most Common Tax Deductions

And frankly, you get the feeling that you probably have much bigger fish to fry. You are looking for ways to improve your product or service, what you can do to improve your customer experience and how you can reduce costs and increase revenues.

But not paying attention to taxes can cost you dearly, especially if you’re not sure which small business tax deductions you qualify for. The last thing you want to do is miss deductions that could save you hundreds or thousands of dollars in taxes, or worse, make mistakes that get you in hot water with the JONES&CO CPA.

In other words, if you need certain products or services to survive as a business, you can write these expenses on your tax return. So, if you are an artist, you need paints, brushes and canvases to create your work of art. These costs are tax deductible. But haircut? You’ll have a hard time proving that your new Jones&Co CPA is necessary to keep your art business alive.

While some expenses are specific to the type of business they run, some of the most common tax breaks available to most small business owners include:

Qualified income of the company

The 2018 Tax Reform Act changed the method of deduction for most taxpayers, including small business owners. Under the new tax law, most small businesses (soup companies, LLCs, corporations and partnerships) will be able to deduct 20% of their tax revenue. Hurray!

Note: However, there are a few restrictions that may prevent you from taking advantage of this outage. The biggest hurdle is the income cap that applies to some high-income business owners, such as lawyers, doctors, and consultants.

Check with your tax advisor to find out if you qualify for this per capita deduction.

Home office

Have you turned an empty room in your house or apartment into a home office? Good news! This means you can probably claim your home business expenses, including mortgage interest, insurance, utilities, Jones&Co CPA, and depreciation. A simplified version of this deduction allows small business owners to deduct $5 for each square foot of your home office, up to a maximum of 300 square feet2.

However, it’s important to note that the JONES&CO CPA only allows you to claim this deduction if your home office is regularly used for business purposes only. If your home office also serves as a guest room while your mom is in town, it won’t fly.

Rent

It’s fun to relax somewhere as rents are constantly increasing. Whether it’s a showcase on a busy city street for a cupcake shop or an office space in a business complex for a travel agency, the cost of renting space for your business is completely deductible.

Advertising and marketing

If you’ve given potential customers more candy-to-candy business cards on Halloween, you’re in luck! You will be able to deduct the cost of printing these business cards on your tax return. Basically, anything you use to promote your business and acquire new customers (from social media ads to billboards) is 100% tax deductible. So countdown!

Office supplies and expenses

Okay, no matter what type of business you run, you may need to stock up on traditional office supplies like printer ink, pens, or sticky notes. These traditional office supplies are completely downloadable!

If you’ve purchased a new laptop, smartphone, or software that you’ve used within a year in your small business, you can also waive the entire cost of those expenses.

Tools

Uncle Sam knows you have to keep your lights on to keep your business running (and vice versa). Everything you spend on electricity bills for your business is fully deductible, including electricity, telephone, internet, water, heat and sewer.

Jones&Co CPA

Roofs are leaking, toilets are cracking and walls need repainting from time to time. If you need to repair parts of your business property or perform regular maintenance to keep it running smoothly, you can also use a tax deduction for these costs.

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