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Most Overlooked Tax Deductions By Small Business Owners

Check out this information on most overlooked tax deductions by small business owners to know about important tax deductions. It is advisable to seek help from a qualified tax consultant for better tax preparation.

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Most Overlooked Tax Deductions By Small Business Owners

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  1. Most Overlooked Tax Deductions By Small Business Owners Check out this information on most overlooked tax deductions by small business owners to know about important tax deductions. It is advisable to seek help from a qualified tax consultant for better tax preparation. www.analytix.com | 781-503-9004 | sales@analytix.com

  2. Tax time is a dangerous time. It’s all too easy to miss a trick and overpay. There is nothing worse than preparing Income Taxes and finding that there were many deductions you could have taken advantage of to lower tax bill. Not keeping track of deductions can be very costly. It is essential to follow an organized bookkeeping and accounting for the entire year to avoid the last-minute rush during tax-filing. The IRS offers a multitude of ways to lower your tax bill. The key is to find which deductions and credits are available — then taking advantage of them. Below are list of deductions which are generally missed out by business owners: Personal Assets Converted to Business Use: If business owners have contributed personal assets, such as a computer, find the fair market value of these assets and claim it as a business deduction. This is subject to depreciation limitations, beginning with the date of conversion. Business Startup and Organization Costs: Business owner may be eligible to deduct some of their business startup costs up and organizational costs. Again there are limitations on this deductions and needs to be checked by professional tax advisor. Disability Access Costs: Incase improvements or remodeling has taken place for business facility to accommodate customers and employees, business becomes eligible for a deduction for these expenses. Research and Experimental Costs: Costs of research and experimentation may be deductible if it is chosen not to list them as capital (long-term) expenses. There are many restrictions and qualifications relating to this deduction. Carrying Charges: Carrying charges are fees and interest on property. Some carrying charges may be deductible if they are not capitalized. Home Office:A home office must be a separate room in business owner’s home to do business and accounting. Part of a living room or bedroom will not count. A percentage of utility Bills, home owners insurance, property tax, mortgage interest, refinance fees, repairs and maintenance, cleaning supplies, office decor, etc. are deductible. Find out the percentage by dividing the square footage of the office by the square footage of the entire house. Mileage or Vehicle: There are two ways to take a vehicle expense. One is to take the mileage basis use when picking up product, supplies, office supplies, meetings, handing out advertising or business cards, meals and entertaining clients, etc. The other way is to take the expense of using the vehicle: fuel, parts, mechanics, oil changes, etc. Along with taking expenses, one can also depreciate the vehicle. www.analytix.com | 781-503-9004 | sales@analytix.com

  3. Retirement Plan Costs: As owner of a small-business and having recently established a retirement plan for the business, the business may be eligible to receive a non-refundable tax credit for expenses incurred to implement the plan. The tax credit may be claimed for a maximum period of three years for retirement plans established after 2001. Advertising & Promotion Cost: Business cards, newspaper ads, information packets handed out, free samples, flyers, product testing, videos and CD’s all can be claimed under business expenses. Money paid to hire temporary help with promotional activities like delivering flyers, product, stuffing envelopes or for even cleaning office and car, etc. can also be claimed under business expenses. Dues and Subscriptions: Dues to professional organizations and magazines that have to do with particular trade or business can be part of deductions. Educational Expenses: Classes or seminars that improve business can be claimed under deductions. Gifts: Gifts to clients and associates are deductible. Laundry and Cleaning:This includes uniforms and Protective clothing and also owner’s clothing when they go out on touring for business purpose. Travel expenses related to business: Hotels, airfare, cab-fare, parking, and cleaning while away from home, trip log is required to claim these deductions. Communication expenses: Cell phone, long distance calls on home phone, extra phone lines into home for business, fax or Internet can be claimed as deductions. Items such as paper clips, bank charges, credit card charges and home office expense seem small and unimportant at the time, but multiply those little things over a year or two and then multiply it times 35% and it can add up to quite a bit of money that should be in your pocket rather than in the federal fund. Remember there are hundreds of deductions throughout the tax laws, and many can be quiet difficult to grasp. It is advisable to seek help from a qualified tax consultant with sufficient experience to determine which deductions apply specifically to your business. www.analytix.com | 781-503-9004 | sales@analytix.com

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