Claiming More Legitimate Deductions for Your Business
It seems like we are always doing something regarding taxes with our businesses. Whether it is Tax Planning for next year, filing quarterly taxes, or determining how to maximize our tax deductions before the end of the current year, it is always taxes, taxes, taxes. Keep in mind, if you want to reduce your involvement, hire a good tax professional to take care of the bulk of this work. In this article, we will encourage you to open your mind and look for additional legitimate tax deductions for your business. And keep in mind that the writer is not a licensed CPA, so these suggestions will still need to be verified with your qualified accountant.
Most business owners are familiar with common deductions: travel, supplies, equipment, home office, meals, insurance, etc. Here are a few that you might not have considered.
Home Security—If you are using your home as an office or keeping any business-related equipment or inventory, you have a right to not only deduct storage or other costs, but also to provide security. There are home security systems that can be installed, and those costs would be deductible, including any monthly charges for the business-related area. But most people are not aware that if you have a dog, even a yippy little ankle-biter, you can deduct the costs of feeding and maintaining your dog. They do not have to be able to pounce on an intruder, their barking can alert you.
Child Tasks—Even from infancy, your children can be an asset to your business. Take promotional pictures that include your children. Pay them for their services, place the income into a trust fund, for college, etc. Their taxes will be much less than what you would pay otherwise. Once they reach a little older age, hire them to perform other tasks. We had a daughter doing office cleaning at age three. She could dust low areas, and the older children would holder on their shoulders to reach high places. They all had fun, and got paid, with most of their pay being set aside in a trust account. By the way, all four children have grown up to be entrepreneurial, learning to make money from a young age.
Divide meals for business meetings—If you hold a business meeting with clients, the tax deductions are larger if each person pays for their own meal. If you explain this to the clients, they can increase their deductions as well.
Full Deduction vs. Depreciation—Some business equipment can be deducted as a lump sum, while other equipment must be depreciated over 5 or 10 years or longer. Work with your accountant to determine which is which.
Charitable Contributions—If your business contributes to various charities, these are also deductible as expenses. Let us support our community or something that is important to us.
Look into other less known deductions with your accountant, and if you find something you think might be deductible, ask your accountant to verify. A couple of other areas to keep in mind are protections for the owners of the company. If the owners were to die, or not have a car to use, this would be damaging to the business, so the business can supply insurances, leased automobiles, etc. And there are certain items that are commonly used in your business, that can also benefit you personally. If you buy a software product that is used by your business, and is essential, that software may also be beneficial to you as an individual. Make sure you check with your accountant on all these potential deductions.
Remember that the IRS is fine with you taking all the legitimate deductions to which you or your business is entitled. It is okay to claim more as long as the deductions fit with IRS code.
I https://www.shopkeep.com/blog/small-business-tax-deductions#step-1 from the shopkeep website.
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