The 10 Purchases You Didn't Know Were Tax Deductible

​Claim your deductions! The 10 Purchases You Didn't Know Were Tax Deductible.
 
Tax time for many small business owners can be a stressor or a benefit to the overall bottom line. When it comes to filing taxes and looking for ways to reduce the tax liability, finding deductions in the day to day operations is vital. Most business owners know the common deductions such as office supplies, advertising and phone use- to name a few. There are however some deductions you may not know about! In this post we will cover the 10 deductions you didn’t know were tax deductible (in no particular order).

1. Local transportation

Many businesses are aware that they can write off car expenses for their vehicles used for business purposes. Oil changes and maintenance are deductible so long as it's on a vehicle used for business. One key deduction many miss though is using local transportation or claiming the mileage on the car. If you take a bus for business reasons, you can deduct those bus fare fees and costs. If you drive your car you can claim the miles driven for business purposes as a deduction.

1. Travel away from home

Many businesses rely on travel away from home to make the business flow properly. Costs for business related travel such as airfare, hotels, meals, and taxi/Uber trips are all pretty common deductions you can write off. Some often missed deductions are the little things that are purchased while away. Purchases such as internet fees at the hotel, meals while traveling, even fees paid on travel related costs such as hotel parking, can all be deductions so long as they were absolutely part of the business travel.

1. Commissions paid to subcontractors

Do you pay subcontractors? The commissions you pay to anyone who you deem a subcontractor can be deductible. It’s important you file a 1099-MISC and 1096 as necessary, but these fees and payments are for sure great deductions you can make at tax time.

1. Depreciation

The word depreciation may sound like an insult to your business but it’s not. In fact, all businesses have depreciation and you can deduct that! Depreciation such as business cost, business use of assets, and sales price for any assets sold could be deducted. Talking with a tax pro can help better explain how and what this could be for your specific business.

1. Business insurance

Many businesses have (or should have) insurance for protection in case of the worst. Insurance is not cheap and many businesses don’t think about deducting that as an expense. You can deduct insurance whether it’s ongoing insurance coverage or even insurance coverage that you purchase for specific events or functions you participate in throughout the year.

1. Interest expense

Many businesses pay interest on various s elements of operations. If your business runs out of your home or a building that your business owns, you can deduct the interest paid on that property. If you took out a business loan or have an investment expense (that you pay interest on) you can deduct that at tax time. Be clear to separate out any personal interest from business as you can’t combine them.

1. Rent expense

If your business rents something-anything- it can be written off so long as it’s needed for the business operations. If you rent out a business space, rent equipment that is a must have, or rent something to conduct operations, it can be deducted. Rent is not just for property. Rent can be for a truck to drive parts around town or it can be rent of an event space for a conference. Rent adds up so why not write it off?

1. Repairs

Does your business have equipment, buildings, cars that have or need repairs? The cost associated with these types of services can be deductible. If the repair work is being conducted on supplies or materials that are used for the business, you can deduct them.

1. Health insurance

The cost of health insurance for small businesses can be rather high. So when it comes to deductions, don’t leave off the payments you make for health insurance. Each plan and business will have different deductions but it’s important to consult with a tax professional to see what can and will be deducted.

1. Internet/computer use

It may seem like an obvious one, but internet and computer use can be deducted. Yes your home internet may be split between personal and professional, but you can identify how much usage if for the business and deduct that. In addition to that, internet set up fees, equipment rentals, and computer upgrades for business use can also be deducted.
 
There you have it- the top 10 purchases you make that may be deductions at tax time. While this list doesn’t cover them all, this is a good reminder to always consult with a tax professional like PKJ Consulting to ensure you are getting your maximum deductions. If you’d like to learn more or connect with our team feel free to reach out to us HERE and we will be happy to assist!