If you’re a small business owner, here are some major tax deductions that you should keep in mind:
1. Auto Expenses
If your business owns a vehicle or you have a vehicle that is used for business purposes then you can claim a tax deduction. You can claim this tax deduction on actual money spent or use a standard mileage rate method for the business use of the vehicle. There are certain other rules relating to auto expenses which your tax advisor can help you understand better.
2. Expenses of Going Into Business
You can get certain deductions on the cost of setting up your business.
3. Books and Legal and Professional Fees
All fees you pay to your tax professionals, attorneys and consultants are tax deductible. You can also claim deductions on the cost of business books! This is because you’re buying the books to conduct the business in the first place.
4. Bad Debts
If you sell goods and are not paid for them, you can deduct the bad debt from your income.
5. Business Entertaining
You can also get a deduction on the cost of entertaining a present or prospective client!
6. Travel expenses
You can deduct travel expenses including fares, meals, lodging, shipping business material, telephone calls, faxes, etc.
There are different rules for tax deductions for interest you pay on loans, credit, etc. You can discuss these with your tax advisor.
As a small business owner, you’ll want to use the services of a good accountant or tax advisor. This person can guide you through the best options for saving on taxes and maximizing your profits.