Small Business Owners: Don’t Miss Out on These Tax Deductions

As a small business owner, navigating the complex world of taxes can be overwhelming. But maximizing your tax deductions can help you save money and keep more of your hard-earned profits. Here are some often-overlooked tax deductions that small business owners should be taking advantage of.
Home Office Deduction: If you operate your business from a home office, you may be eligible for a home office deduction. This deduction allows you to deduct a portion of your mortgage or rent, utilities, insurance, and other home-related expenses that are directly related to your home office.
Start-Up Costs: When you first launch your business, you can deduct up to $5,000 in start-up costs such as advertising, employee training, and legal and accounting fees. Any additional start-up costs can be amortized over a 15-year period, providing you with ongoing tax benefits.
Pass-through Deduction: The Tax Cuts and Jobs Act introduced a new 20% pass-through deduction for eligible small business owners. This deduction applies to “pass-through” entities such as sole proprietorships, partnerships, S corporations, and LLCs, allowing owners to deduct 20% of their business income from their taxable income.
Business Travel Expenses: If you travel for business purposes, you can deduct a wide range of expenses, including airfare, lodging, meals, and transportation costs. Keep detailed records of your expenses to ensure that you are able to maximize this deduction.
Retirement Contributions: As a business owner, you can deduct contributions made to retirement plans such as a SEP-IRA, SIMPLE IRA, or solo 401(k). Not only does this provide a tax benefit for your business, but it also helps you save for retirement.
Employer-Paid Health Insurance: If you provide health insurance to your employees, you can deduct the cost of these premiums as a business expense. This deduction can also apply if you are self-employed and pay for your own health insurance.
Equipment and Technology Expenses: Whether you purchase computers, machinery, or software for your business, these expenses are generally deductible. Check with your accountant to determine if you can take the full deduction in the year of purchase or if it needs to be depreciated over time.
Don’t miss out on these valuable tax deductions! Consult with a tax professional to ensure that you are taking full advantage of the deductions available to you as a small business owner. By maximizing your deductions, you can reduce your tax liability and keep more money in your pocket.