It’s just about the middle of March. You know what that means! Getting your taxes in order now will save you plenty of time, money, and frustration down the line. Asking your accountant about deductions that you’re eligible for sounds difficult, but it’s not! Many expenses are deductible, but the hard part is keeping track of them all!
Your Advertising Cash Flow
The money that you infuse into your business counts as a deductible expense. The easiest way to see this connection is when you flex your advertising budget. Ads, websites, email marketing, influencer payments, and branded merchandise all fall into this category. Because of the wide variety of opportunities available, your accountant needs to be vigilant about potential errors.
Using Your Home as Your Business Base
Even before the pandemic, many small business owners operated out of the homes. Since office commutes have converted to telepresence-equivalents, this arrangement makes even more sense. So if you have a dedicated home office, then you can use it as a tax write-off.
You’ll need to get around town somehow. That’s why smaller businesses can cite vehicle-related costs—necessary upkeep – namely, fuel, repairs, and declining value all count. Log the miles you accumulate while performing business-related tasks such as going on a business trip, making a delivery, or going to a brief in-person appointment. However, you cannot claim standard commutes on your taxes. As such, they are not eligible for write-off status. You can, surprisingly enough, track relevant tolls and parking fees.
Contributions to Charity
Now let’s talk about your relationships with local charities. If you’re a sole proprietor or run an LLC that serves as such, you can’t take advantage of these handy deductions. Likewise, S-corps are excluded from this list. C-corps, on the other hand, can deduct charitable donations. The time you invest in these activities is not factored into your tax documentation. In addition, there are some ground rules you must follow: For example, you’re not allowed to deduct more than 10% of your income based on this one expense alone. Also, the IRS has to approve the organization you partner with; without this qualification, the deductions are invalidated.
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