How do I get to keep more of my hard-earned business money before the government taxes it away?
: TAX DEDUCTIONS
As a small business owner, you work, try to grow your business and hope to make a profit. What you keep from that profit depends on the income tax you pay.
You are not taxed on all the income you bring in via sales, fees, commissions, etc. Instead, you are taxed on what you keep after your business expenses.
What Can I Deduct?
There are volumes of books of deductions – what you can deduct depends on your situation. Although the IRS allows deductions, there are strict limitations on them. In this section, we will cover some of the deductions, but you are free to refer to the forms and publications below for further tips.
- : Medical Insurance
- : Travel, Meals & Entertainment
- : Rent or Mortgage
- : Interest & Taxes
- : Advertising & Promotion
- : Car Expenses
- : Self-Employment Taxes
- : Depreciation
- : Utilities & Telephone
Some important tips to aid you throughout the year to allow you to beef up your bottom line:
KEEP GOOD RECORDS! You have to be able to provide proof of your expenses including when the expense was incurred, paid, the amount and the reason why it is deductible.
FILL OUT ALL FORMS AND SCHEDULES REQUIRED! You’ll want to clear up any red tape before you get tangled in it – read instructions carefully before and after, or review your taxes before they are filed by your accountant or bookkeeper.
FILE ON TIME! Here, the previously mentioned tips come into play again; if you’ve kept good records year round and prepare your documents ahead of time, you’ll be better prepared to file early and accurately.
You can download forms from the IRS forms and publications page, but we talk about the following forms throughout this tax guide:
We also have our tax tips guide in downloadable form: DMS Tax Tips (PDF, 28K)