Since the year is now more than half way over, it is important to keep in mind the different tax deductions that can help your business. There are a few basic tax deductions that small business owners need to think about before tax season approaches. As a business owner it is important that you help your business in every way possible.
Here is a list of a few tax deductions that are easy to keep track of and can help when tax time approaches.
- Mileage – If a car is used for business purposes then mileage can be recorded. The reimbursement rate for mileage is 55.5 cents per mile. Parking fees and business related tolls may also be deducted. Make sure that you are keeping a mileage log for record all the mileage used for business purpose. No not count any mileage that is personal use.
- Books and Professional Fees – Spending money on books, including books on legal or tax information, to help you run your business can be very helpful when starting a business. All of these books are deductible at tax time. Also any fees spent on lawyers, tax professionals or consultants can be deducted in the year that they occur.
- Travel – With some business, travel can be very important in building client relationships. Many business related travel expenses, including plane fare, rental car expenses, taxies, lodging, meals, shopping for business materials, cleaning clothes, phone calls, faxes and tips are all deductible. When combining business and pleasure id ok as long as the main reason for going is business. If the family comes along their expenses are not deductible.
Business Entertaining- Another way to build client relationships is to take them out for a meal. When entertaining a client or perspective client 50% of the check can be deducted at tax time, if business is discussed before, during or after the meal. Make a note on the bill to remember which client and the purpose of the meal.
There are many deductions that can be taken during tax time, and these are just a few. Remember that a good tax professional will guide you through tax time and what you will need.
Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.
Most businesses manage to pay their bills on a regular basis, but that doesn’t mean they’re doing the best possible job of managing cash flow on a monthly basis. Just as in households, having a smart business budget is one of the keys to eliminating cash leaks and increasing the amount of profits you get to turn around into expanding your business.