The Internal Revenue Service allows business owners to deduct a variety of expenses from their taxable income. You may be surprised to learn about some of the business-related deductions that can save you money on your tax bill.
Tax-Deductible Business Expenses
If you rent a building that you use for business purposes, you may be able to deduct the amount you pay in rent when you file your company’s taxes. The deduction can apply to an office building, a warehouse, a parking garage, or another type of structure that you rent and use to operate your business.
Furniture, office equipment, machinery, and vehicles can all decline in value over time. If you own those types of assets, you’ll be able to deduct depreciation when you file your taxes.
Money that you pay your employees is tax-deductible. That includes regular salaries, commissions, bonuses, vacation pay, and benefits.
If your company provides employees with educational benefits to help them advance in their careers, you may be able to write off those costs when you file your tax return. Qualifying expenses can include continuing education classes and programs to help employees obtain professional licenses.
The IRS allows business owners to deduct expenses related to meals with current and prospective clients, as well as meals, parties, and social activities for current employees. Those expenses can’t be extravagant, and other restrictions apply.
Your company will be able to write off the cost of business insurance, as long as the IRS deems the coverage ordinary and necessary. Depending on your circumstances, you may be able to deduct premiums for general or professional liability, workers’ compensation, and other forms of insurance.
Expenses related to advertising and marketing are generally tax-deductible. That can include TV, print, and online marketing, as well as flyers, business cards, and other expenses, as long as the IRS considers them ordinary, reasonable, and necessary.
Get Professional Tax Help
These are just a handful of expenses that you may be able to deduct when you file your company’s tax return. You’ll also have to add up all the deductions you’re eligible for and compare that to the standard deduction to figure out which would be more beneficial to your business. If you decide to itemize business-related expenses, you’ll need to keep documentation in case your company gets audited.
The accountants at DOAAR understand federal tax laws and can help you figure out which business expenses are and are not tax-deductible. We can prepare your tax return and make sure that you take all the deductions you’re eligible for to minimize your company’s tax liability. Contact us today to learn more.