Tax Deductions For Your Business
If you are a small business owner, there are several deductions available to you if you know what to watch out for. To reduce your tax liability and save money with the Internal Revenue Service (IRS) each year, there are some common deductions to keep in mind: Start up deductions: These kinds of deductions are made for expenses generated with the start up of your business. Deductions up to $5,000 for the business start up and up to $5,000 for first year organizational operations can be made. These deductions can be made for expenses after Oct. 22, 2004. If they are made before this date or if they exceed $50,000, you may run into unique rules. Any expense that is not covered may be amortized over a 180-month time period from when you open your business. These expenses may include advertising, market research or employee training among other things. Educational Deductions: for more information, read Publication 970 for everything about educational deductions. As a general rule, employers are allowed to deduct educational expenses for employees if the class work can help improve job-related skills or if that work is required for continued work at the company. For employers who are self-employed, some education expenses like transportation to and from class can sometimes be deducted. Vehicle Deductions: this can be tricky so read this carefully and keep records. You can deduct vehicle expenses either by the mile or for gasoline and maintenance expenses. When using your personal vehicle for business purposes, note down where you went and the nature of your trip. If your employees use a business car for personal use, record the value in their W-2 forms or wages. You can also save more by using environmentally friendly vehicles. Hybrids entitle you to up to $3,150 from the government. Deductions for Your Cell Phone Bills: If you use your cell phone for business, you can deduct it on your taxes. Do not use it for personal calls, though. Keep good records, including the physical bill, as proof that calls were made for business. Find a small business loan that meets your needs with help from the financial service specialists at MerchantLoans.com. |