Tips for Maximizing Business Tax Deductions

business owner

It’s that time of year. If you have already filed your business taxes, good for you! If you haven’t, you’re in good company. The sheer amount of documentation and paperwork required to effectively file business taxes means many business owners are leaving it to the last minute. In the rush to get your taxes ready, it’s easy to miss deductions that you may be entitled to. 

Here is a quick list of tips for businesses to ensure they’re getting the maximum number of deductions possible. 

  • Is your business a startup? Look for startup deductions. Often, the costs involved in launching a business are deductible, at least for the first several years. 
  • Remember the little things. While they may not add up to much on their own, expenses such as office supplies, postage, and utilities, can build up into a nice deduction for your business. Keep receipts for all your purchases. 
  • Are you paying interest on loans? It may be deductible. Most businesses use some form of credit to finance themselves, particularly in the early years. If you do have credit accounts, the interest you pay is often deductible. 
  • Personal vehicle usage. Many small business owners use their personal vehicle for business-related trips. Calculate this deduction using the standard mileage rate, and don’t forget to include parking and tolls. In some cases, vehicle depreciation may also be deductible. 
  • Track your legal and professional fees. Chances are good that you are paying for a variety of memberships and professional services. Fees paid to lawyers, tax professionals, and consultants are generally deductible in the year they are incurred, as are memberships to business-related associations. You can also often deduct the costs of any books you purchase to help run your business or any educational resources you’re using in the workplace. 
  • Track your marketing expenses. The cost of promotional materials and services is often deductible. These services might include digital or print ads, search engine optimization, trade shows, or even small items such as business cards. You may also be able to deduct some entertainment expenses if you’re taking clients or associates out for meals or nights on the town, or purchasing gifts for them. 
  • Include equipment or software purchases. Some small businesses can write off the costs of business assets such as machinery or software. Often, these assets are depreciated over a period of time, so they may give you several years of deductions.
  • Charitable donations. If your small business is not incorporated, some charitable donations are deductible. 

Hire a professional tax services firm

Rather than doing your taxes yourself, you may find that a professional services firm will be able to maximize your deductions for you. 

DOAAR is a small business tax, bookkeeping, and consulting services firm, with an additional focus on its clients’ personal finances. Specializing in bookkeeping, controller, and CFO services, our offerings span daily accounting, month-end close, complex financial modeling, and oversight. From execution to analysis and strategy, we provide clients with a powerful and fully integrated back-office accounting solution.