Are You Including These Tax Deductions for your Business?

If you’re a business owner, you do not have time to worry about tax season. Your day-to-day concerns involve running your business. We find that business owners overlook money-saving opportunities that were not captured throughout the year.

In this article, we discuss business tax deductions that clients frequently forget to report during tax season.?We intend to help you engage with your tax preparer to make sure these expenses are accurately captured on your next tax return. The IRS maintains a list of?tax-deductible business expenses?with the most up-to-date information.

Wifi & Cable Some business owners forget to capture WIFI and cable expenses. For those working from home, look carefully at your cable costs, internet packages, and all the “soft costs”. You don’t necessarily need to have a home office to take these deductions. When you move from one location to another, make a note of all the costly internet set up fees.

If you’re using the WIFI for other things, you may not want to take a 100% of it. For instance, you calculate that you want to take 33% of the internet cost. Even if you’re looking at ads on cable for your job, and you’re using cable for other purposes. Put it down same with cable – even a smaller percentage if you’re using it for a lot of other things.

Technology Purchases Business owners already know that when you buy a laptop, cell phone, or iPad for work, you should deduct it on your taxes. Don’t forget the accessories you buy, as well! You probably purchase all sorts accessories for your day-to-day business needs including, such as wires, drives, and headphones.

You can even deduct a portion of a technology purchase for your child or spouse when they support you with your business. I’m guessing they know more about technology than you do and they’re probably helping you all the time. If you’re working with a tax preparer, bring it up. A qualified tax preparer will tell you what they feel comfortable with and advise you.

Marketing Whether you’ve built a website or launched social media campaigns, you can deduct many of these marketing costs, as long as they are reasonable and directly related to your business.

Home Office Deductions Sole proprietors, partnership members and business owners can take the home office deduction at their Individual level. The IRS requires that the designated space is?exclusively used for business affairs and is filed using?IRSForm 8829.?To calculate the deduction for business use of the home, the IRS offers either a complex calculation or a?simplified option that?involves taking $5 for every square foot of designated workspace.

Utilities, interest & property taxes are allocated based on a percentage of use to home office deductions, while upkeep, decorating, and expenses of that nature are not a part of home office.

For those who don’t own their home and rent, it’s a free deduction because you can’t deduct rent so you’re converting a non-deductible expense to deductible expense. Those who own your home, you’re still getting a percentage of utilities and not all the property taxes allowed. You’re getting some of that, depreciation, whole mortgage interest, and repairs and things like that.

This article is for?educational?purposes only and should not be taken for business advice about your specific situation. Please schedule an appointment?with a Principal at Bernstein?Financial?Services to help you determine your optimal planning strategies.