[vc_row][vc_column][vc_column_text]As mentioned in our previous post, knowing what you can and cannot deduct can be the difference between owing thousands of dollars to the IRS or keeping that money in your bank account. There are many business-related items that can be deducted, and while many of these items are pretty obvious for small business owners, there are others that are often overlooked.
Here are three common deductions you may be forgetting about:
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Startup Cost
Starting a small business is already a large feat. You have to worry about sales, marketing, your product or service, and your team. There are also many different costs associated with forming a new business. From buying equipment and securing an office to marketing and creating a website, most of the expenses you incur when setting up shop can be deductible.
It’s important to remember to keep all receipts and be organized throughout the year and especially during your startup period. This will make it easy for your accountant to help with your deductions when it comes time to file.[/vc_column_text][vc_column_text]
Home Office
Did you know that if you own a small business and work from home, you are able to use your home office as a deduction? This deduction seems to be the most overlooked one, with about only half of small businesses operated out home offices utilizing this deduction.
There are two main types of home office expenses that can be deducted – direct and indirect.
Direct expenses are expenses that only occur in the office area of your home, such as new paint or repairs. A direct expense can be deducted in full!
Indirect expenses are expenses shared by the office area and the rest of your home, including utilities and general repairs. An indirect expense can be deducted in proportion to what space your office takes up in your home.
To read more from the IRA about deducting a home office, click here.[/vc_column_text][vc_column_text]
Credit Card Interest
This is a minor expense, but also frequently overlooked. If your business requires you to purchase expensive equipment, software, etc., you have the ability to deduct any interest paid on these items.
If you use your credit card for both personal and business expenses, it is essential that you keep track of all purchases since you are only able to deduct the purchases used for the business.
Properly keeping track of all of your business’ deductions will help your business keep its money where it belongs, in the bank. Make sure to be thorough and take advantage of every deduction that you qualify for, even the minor ones, because they will add up to big savings!
Be sure to consult with your small business accountant when it comes to your questions regarding deductions – they will be able to let you know what can and cannot be deducted and help you save the most money![/vc_column_text][/vc_column][/vc_row]