Tax is the bane of every business owner’s existence. If only you didn’t have to pay the IRS thirty pieces of silver, your budget would be bigger and your resources would stretch further. Unfortunately, the Internal Revenue Service doesn’t mess around, and if you fail to do your bit, you’ll be hit with a huge fine or a potential court case.
There is good news, though – taxable expenses. Not only is your expense sheet an excellent way to lower your contributions and save money, but it turns out that companies don’t claim half the stuff to which they are entitled.
Here are four you should add to your return to deduce your tax expenses.
Business Insurance
If your view of insurance is outdated – it’s unnecessary and a waste of money – here’s something to cheer you up. There’s no doubt that insuring your new business is essential as you never know what scenario is around the corner *AHEM* COVID-19 *AHEM*. The current pandemic should teach you one thing, and that is that it’s better to be safe than sorry. Still, it isn’t an overhead you must take on the chin since premiums are tax-deductible. As the experts explain, insurance is a necessary fee of trading, so it’s eligible.
Professional Fees
There are thirty million small businesses in the US alone, which highlights how hard it is to stand out in a saturated market place. One way to gain exposure is to join accredited bodies and regulators to prove you’re a reliable and trustworthy organization. Sadly, lots of bosses believe it isn’t worth the investment and back out. It’s sad as the fees and expenses for licences and memberships are more than welcome on your tax return. As a result, not joining training programs is harmful in many ways, from ensuring your reputation appears old and outdated to increasing running fees.
Home-based Work
A home office is an employee’s balance between life and the workplace. Therefore, part of the expenses they accrue is career-related, making them taxable. Typically, it’s self-employed, freelancers who get to claim home office fees, yet COVID has turned everything on its head. Currently, almost double the number of workers is remote due to the challenges of the pandemic. Although they can claim for themselves, you can tell them that the company is happy to take care of the hassle and run it through the books, saving everybody money.
Assets
It’s common knowledge that business investments are taxable as they make up for most of the items listed on tax returns. What isn’t well-known is the definition of an asset. You may assume it’s a vehicle or a computer, which is true, but you may miss out on other costly purchases. For example, a trademark or patent fee is an intangible asset that relates solely to the firm. The same goes for a business lawyer’s retainer, as long as they only bill you in a corporate capacity.
Owners and entrepreneurs miss several products and services noted on this list. Are you up to date with taxable expenses and what you can and can’t claim?