When tax time comes around, it seems like many businesses find themselves suddenly scrambling trying to figure out which business tax deductions are available to them. With tax rules and codes changing seemingly daily, it's understandable that business owners may not know exactly what functions of their business qualify for a deduction.
Here are a few of those last-minute tax deductions and expenditures that may help maximize that bottom line:
- For the Entrepreneur: Starting a business is viewed as a capital expense which must be capitalized and amortized. You may, however deduct up to $5,000 during the first year in business.
- For the Learner: If you are maintaining or improving required skills through seminars, classes, or conventions, you can also deduct those expenses.
- For the Commuter: President Obama's fiscal cliff legislation allows employers the ability to offer $240 in tax-free benefits per month to those who are using a carpool or public transportation each month to get to and from work. Old IRS rules gave just $125/month. The employers get the deduction by using the current Commuter Choice benefit. Additionally, payroll taxes can be reduced by allowing employees the ability to use pre-tax dollars for carpool costs or for commuter passes.
- For the Pajama-Wearer: Working from home has a lot of perks, including home office tax deductions. If there is a designated office space within the home used solely for business, a number of deductions are available for things like rent, internet service, repairs, and utilities.
- For the Independent One: If you are self-employed, you likely qualify for a significant health insurance deduction. You may be able to deduct premiums for payments for medical, dental and long-term care for you and your family.
- For the Subscriber: Section 179 offers a tax break for software and subscriptions. Before, companies used the depreciation of the cost of software over the course of three tax years, now it can all be expensed during the tax year it was purchased.
- For the Traveler: Book yourself somewhere wonderful for that business meeting, because it's tax deductible! Additionally, the cost of getting you to that hotel is also completely deductible. As for meals, they are deductible also, but only 50% of the bill.
- For the Researcher: Efforts centered around product development including the improvement of products, processes, software, techniques, formulas or inventions can qualify for federal and state research & development credits (R&D). Although more time consuming than some of the other deductions, it can be one of the most beneficial deductions.
Acena Consulting knows how to leverage business tax so every deduction is accounted for. Contact us today to see how we can help you get more out of your business taxes.
Think you may qualify for an R&D tax credit? Try our R&D calculator to estimate your potential credit today!