What Deductions Are Offered for a Small Business Owner?

So, you’ve opened up a small business. Congratulations are in order, first and foremost, especially if your small business is still going strong. Owning your own business is filled with many challenges and difficulties, but it’s also filled with many surprising and often hidden joys. One of those joys, as you’ll soon find out if you play your cards right, is the fact that you likely qualify for several different deductions available to small business owners. These deductions can save you a ton of money in the long run, money that can really be important when your business is young and likely vulnerable. Overlooking them, however, could cause you major losses and could potentially destroy your business.

Do you have a home office and/or run your business from home? If so, then you’ve got a viable tax write-off on your hands! Even if you don’t do the majority of your work in your home, you can still qualify for this excellent deduction. The only real stipulation is that you use your office strictly for business. If you’re doing other things in it, it doesn’t count!  Don’t try being sneaky about it either; there are so many other deductions available that it’s not worth it to risk getting in trouble for lying to the IRS.

Does the operation of your small business require you to drive? Whether it’s two miles down the road or halfway across the country, you could be deducting your mileage and saving money. If, however, you want this deduction to actually do you some good, you have to be meticulous about record keeping. Know and write down how many miles you drive on business-related trips. If you have to pay for any extras, like parking, be sure to include those in your records as well.

Speaking of detailed record-keeping, if you’re willing to keep careful notes, you can deduct the amount you spend on the phone for business-related purposes.  Fortunately, if your phone company or provider itemizes the calls you make and includes the duration of each call, you can do this without too much trouble. Simply make note of the business-related calls and factor them in when you file. For an easier option, purchase a phone that you use only for business. Not only can you deduct all of the charges associated with your bill, but you can also deduct the cost of the phone itself in most cases.

Are you interested in learning something new? Well, if that “something” applies to your business in any way, you’ll be glad to know that you can write it off! If you take a class to learn a new software program or to become licensed in your area, for example, all associated costs can be deducted. Don’t forget, as well, that you can write off the costs of associated things, like books for school, notebooks and other necessary materials, and even the gas spent getting to school and back.

Have a tax question? Ask one of our tax professionals.