Small Business Tax Write-Offs

small business tax write offs that are often forgotten

When you’re running your own small business, it’s important to be able to get as much money back as you can. Why? Because running a business is expensive! If you’re an online based service business, like mine, it’s slightly more affordable. If you’re a product or brick and mortar based business small business tax write offs are crucial for staying afloat. The more that you write off the less taxes you have to pay on your business, which would be great, wouldn’t it?

Every business is different and allows different write offs, be sure to contact your local tax consultant before doing your taxes.

Here’s some write-offs that you can use for your small business:

Advertising & Promotion

Do you promote on Facebook, Instagram, Pinterest or any other platform? Then add that to your tax write offs. What about any materials or cost of printing flyers? Tack those on there too. Guess what? That really expensive website that you just bought, write that baby off! That’s considered advertising because a website is literally advertising your skills online. Are you interested in working with a designer and developing your awesome website now that you know it’s a tax write off, check out my new launch coming November 2017!

Auto Expenses & Mileage

Do you drive to meet up with clients or use your new car specifically for business? That baby is a tax write off! The insurance and gas that goes into it is also a tax write off too! The registration fees and repairs that go into it are also tax deductible. Talk about amazing, huh? But, something to note before you jump to buying an Audi, it has to be exclusively for business.

Bank Fees (for bank & credit card)

If you’re a small business, you need to have your own business bank account. My favorite bank that I use for business purposes is Capital One Spark Business. No fees are attached to a checking account and they have many different options if you need a credit card. The fees that may be attributed are tax deductible. Even late payment fees! I can already hear your hallelujah from here!

Business Licenses & Permits

Are you a brick and mortar or product based company? Then you probably know exactly what I’m talking about when it comes to business licenses and permits. They add up over time, don’t they? Those are all tax deductible. So, go ahead and schedule that next art fair that you need a business permit for.

Consultation

Did you need consultation on anything in the last year? Did someone help you figure out how to work your business? It’s tax deductible. Now that you know consultation is a tax write off, are you ready to book a coaching call with me? I offer a free 40 minute session where we’ll cover what your dreams are and where you want to see yourself in your future. Book your call today!

Cost of Goods Sold

This is specifically for brick and mortar companies or product based goods. The cost of materials and even the cost of labor are tax deductible. So, you’re not having to pay taxes on the hours that you put into making your goods. You’re only paying taxes on the profit – which is nice!

Dues & Subscriptions

Let’s say that you’re a photographer, you may pay dues to a website or professional magazine that helps you gain followers and traction by posting your photos on their page or magazine. That’s tax deductible. Another example would be for designers who pay for yearly subscriptions or dues to AIGA. This might look different depending what industry you’re in.

Education

I’m looking to take educational classes to further my understanding of finance so I can better help all of you, that’s tax deductible! Pretty sweet, right? Even all the books that i’ve bought over the year, I can write those off too!

Equipment Rentals

If you need to rent equipment to get your job done, then you can deduct it. Photographers, can I get an amen?

Gifts Given

Some small business give gifts as an incentive for referrals which is a great marketing technique, by the way! The only snag, is that you can only write off $25 per year per person. Anything over that amount doesn’t count.

Home Office

If you work out of home office or you rent out a space somewhere else, that’s tax deductible! But, be careful when you’re writing off your home office. To be eligible for a deduction, it needs to exclusively be used for business. That means your great aunt Gertrude can’t say in there when she comes to visit. You can’t use that space for anything else except for business.

Insurance

Do you pay insurance on anything? Put that in your deductions! Think about renters insurance, auto insurance, or even business insurance.

Interest Expenses

Did you have to take out a business loan to get your company up and running? All that interest is tax deductible. That means that you’re only paying on the actual loan itself, which is so nice especially if you have a high interest rate!

Legal & Professional Fees

If you had to consult a lawyer (hopefully not!) or maybe you hired an accountant to manage your books throughout the year, that cost is completely tax deductible. Wahoo!

Meals & Entertainment

This is a fun one that I wish I took advantage of more! If you’re meeting a client or taking them out to dinner, then it’s tax deductible. However, if you’re at a coffee shop by yourself getting things done, then that’s not deductible. Sorry!

Office Expenses

All those pads of paper, pens, pencils, land line, equipment, postage, and software are all tax deductible. Heck yes! Just be sure to keep meticulous notes on what you buy throughout the year.

Rent

I’ve mentioned this previously, but if you rent out your business space – be sure to write that off!

Subcontractor

Did you have to renovate that space? Then write off the subcontractor that you used to help you get your space looking as great as it is!

Telephone (including cell)

The landline in your office and even your cell phone are tax deductible. But, if you use your cellphone for personal purposes – you can’t write it off. Most business owners that I know, just eat that cost. Others buy a cell phone that specifically for their business. That choice is up to you!

Travel

Did you have to travel for business? Photographers, those travel expenses that you spent on getting to that destination wedding are totally tax deductible! Amazing, right?

Utilities

Last, but not least, are the utilities that you use for the space that you rent for your business. Electricity, water and garbage, and internet are all tax deductible!

That’s a long and extensive list of small business tax write offs that you may be able to use for your business. Be sure to keep detailed notes on all your expenses because owning a small business means that you’re more likely to be audited by the IRS. You want to make sure that you’re in the clear if they come knocking on your door. To make sure that all my expenses are in order, I use Freshbooks. This is hands down one of my favorite tools that I use in my business because it keeps track of everything for me and, well, I’m a finance nerd. Guilty as charged.