Tax Season: 3 Things You Can Write Off for Your Small Business
Filing taxes for a small business can be a nightmare if you don't have any accounting training. There are tons of tax loopholes and things you need to know as you process your tax claim. Here is a quick list of items that a professional accountant can write off to help you maximize your returns at tax time.
When you own a small business you are legally entitled to write off a space to operate your business. This means that if you rent out an office or warehouse to operate the infrastructure of your business then you can claim that back on your taxes and receive a small tax break. If you run a business that is still in the early stages and do not have a space that you rent, but still operate out of your home then you can claim a small portion of your rent or mortgage.
You can claim expenses like mortgage or rent, heat, and water as you need them to function in order to operate the business on a daily basis. The amount that you can claim will vary from state to state and depend on the size of the space that is used for business purposes. Check with a professional accountant that can work with you one on one to see the maximum amount you can claim for your specific situation.
If you have to travel for your business then you are entitled to claim expenses such as gas, a small portion of food you consume on the road, and hotel rooms that were purchased. If you are travelling in order to benefit the business and to help it grow, the the government allows for a portion of those expenses to be claimed on tax returns with the hope that the business will continue to get bigger to the benefit of the economy.
Trips such as conventions or even outdoor festivals where you have an opportunity to showcase the business to the public could be eligible as a tax write off for your small business. Make sure that you save all receipts related to each trip so that you can prove your expenses in the event that you ever get audited.
Any advertising that you take out in the name of the business is a tax write off for your small business that needs to be claimed when you file. This includes items like ads in the newspaper, flyers, stickers, business cards, and coupons that are given away to customers in the hopes that they will become a regular customer. Advertising hopes to spread awareness about the business and can help to attract new customer bases that might not otherwise be aware of the product of services.
When taking out ads, make sure that the bill comes invoiced directly to the business and save a copy of the ad for your files so it can be referenced if needed for tax purposes. The amount that you will receive back on your taxes won't be the full amount that you spent to take out the ad, but you can get a small portion back in the form of a tax return provided you don't owe any taxes.
A professional accountant such as Homer Wilson & Co Ltd will be able to work one on one to go through all the receipts, invoices and payroll stubs to make sense of your tax claim.