Tax Deductions: Three Important Tips an Accountant Wants SMBs to Know

Tax season can be an awfully stressful time for many people, especially for small business owners in Naples, FL. The stress can easily double if this will be the first time you have to compute the taxes your business owes the government.

Fortunately, computing your business tax can easily be outsourced to a respected bookkeeper such as one from Perfect Accounting Service. Doing so allows you to focus on running your business to the best of your ability and maximize your profits. All that’s required is that you have a well-maintained book and properly filed receipts to get the job done.

In the event you want to try your hand in computing your own taxes this fiscal year, you may want to do some research to understand what items should be included in your computations. Additionally, an experienced accountant may also advise you to take note of the following tax deductions you may be able to take advantage of:

Young Happy Businesswoman Calculating Bill At Home

Home Office Deductions

If you are operating your business out of the comfort of your own home, you can easily file a tax deduction. After all, home offices are an operating expense, so it only makes sense the IRS will allow you to make this deduction. To qualify, your home office must be dedicated solely to your business. Measure the square footage of your home office and multiply it by $5 (up to 300 sq. ft.). Take note that this is applicable even if your home office only takes up a fraction of a room.

Insurance Premiums

The IRS understands that SMB owners are probably paying for their own health insurance, which is why they allow for insurance premium deductions. There are caveats, however, as you must be able to prove that you were ineligible for coverage through the company health insurance of your spouse. Similarly, your deduction must not be equal or more than your business’ net profit. Otherwise, your insurance premium is 100 percent deductible.

Car Mileage

Businesses that require a lot of driving around are eligible for mileage tax deductions. Document your mileage, tolls, and parking fees every time you take your car out for business purposes. Home-based businesses may start computing from the moment you pull out of your driveway to the moment you get back home. Come tax season, compute your total mileage and multiply it by the credit stated on the IRS website (the credit may change from year to year). Be sure to subtract any personal expenses before you compute your deduction.

Source:

A dozen deductions for your small business, bankrate.com