Tax Deductions Every Small Business Owner Should Know

Running a small business is both exciting and overwhelming. The financial aspects are key, though, for your long-term success. Considering that you may not have access to an entire team of accountants and tax professionals, filing your own taxes can be intimidating. As a small business, you may be entitled to certain tax deductions that can help manage your cash flow. Here are the top tax deductions that every small business owner should know.

Advertising and Marketing

In today’s technology-laden world, advertising and marketing deductions for small business are more comprehensive than in previous decades. The most commonly overlooked advertising and marketing expenses when it comes to tax time are:

  • Logo and business card design services
  • Website design and hosting costs
  • Thank you cards for customers
  • Print and online advertising, such as ads and boosted posts
  • Event sponsorships

Depreciation

Depreciation is an accounting technique that considers the declining value of certain durable assets, such as computers, furniture, and equipment. Depreciation as a tax deduction works by taking the cost of these items and spreading it out over the useful lifetime. You can take a portion of the value each year as a tax deduction for your small business.

Home Office Expenses

As more people decide to evolve their hobbies into small businesses, home office expenses should be tracked for tax purposes. The IRS has very clear and strict guidelines about what qualifies as a small business and how to calculate any deductions. If you have a space in your home that is used solely for your small business, you may be able to deduct utilities, rent, and other costs, just as you would for a brick-and-mortar business.

Personal Tax Deductions

Depending on the size of your small business and other factors, there may be some other deductions that can be included for your small business. These most often apply to sole proprietors, but other types of small businesses may also qualify. Specifically, you may be able to deduct the cost of childcare if you work from home and can’t run your business and watch your children. You may also be able to deduct any contributions to your retirement plan, as well as healthcare expenses, including premiums for insurance.

--

--

--

David began his career as an assistant software engineer at Triple Vision Inc. in Minneapolis, quickly rising through the ranks.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Step 2: Get Your Stuff Together

5 Money Fundamentals Women Need To Know To Build a Secure Future

How long does it take for a mortgage decision to be made?

Financial Performance of the Second Quarter Ended June 30, 2020

The rise of DIY investing explained

Can Vanguard Comsumerize Alternative Investing and the Yale Endowment Model?

Three Things You Need to Know About Options Trading

How to create a budget when you are terrible at managing money.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
David Beskar

David Beskar

David began his career as an assistant software engineer at Triple Vision Inc. in Minneapolis, quickly rising through the ranks.

More from Medium

15 Lessons from Richard Branson

What are finanicial statement and what they means

6 Entrepreneurial lessons from Elon Musk

6 Entrepreneurial lessons from Elon Musk

Humility Is The Ultimate Virtue