Tax Breaks that All Entrepreneurs Should Know About
The positives of being the person in charge and controlling your destiny often overshadow the uncertainties of owning your own company. You may miss receiving a steady paycheck, but the upside is incredible: time, flexibility, and the potential for greater income.
A chance for which every entrepreneur should be mindful of is potential tax breaks for a business owner.
There are many financial benefits that every self-employed person needs to know to help capitalize on their hard-earned dollars. Below are useful suggestions for you to consider.
Use Your Office
If you are like many business owners, your home swiftly becomes your first and sometimes the only office. Did you know that some home office costs can be written off on your taxes? The savings can be sizable, and instead of guessing the costs of monthly office space, you get to stay home and save dough. The IRS offers ample evidence on determining the area you use for office purposes and how to organize your tax return.
All of The Lights
Speaking of your home office, if you set up your space at home, you can also write off portions of your utilities – phone, electricity, gas, and cable. These expenditures are likely to increase as your operation matures. You can subtract a percentage of these costs on your taxes as company use. Here is an essential tip: keep comprehensive records and receipts for electric bills, utility bills, and repairs.
Pay your Dues
Have dues or professional memberships related to your industry? Subtract them! Only dues to professional establishments, trade associations, and chambers of commerce are deductible; dues to country clubs, airline clubs, even if the memberships are for business commitments, are not deductible. Joining industry groups can be prized to your business growth, and the aptitude to deduct dues makes membership a helpful investment.
Takes Money to Make Money
Entrepreneurs know that the more folks who know about their brand, the better. While costs for advertising, marketing and promotion – from brochures, and signs to paid social media campaigns – may seem expensive, the good news is that all marketing and advertising costs are 100% deductible. The list of accepted items to expense is noteworthy, so make sure you review your yearly expenses and garner the tax benefits you warrant.
If you're a parent and your kids are twelve years of age or younger, you will be pleased to know that childcare can be tax-deductible (reliant on on your income level). If your spouse or another adult family member needs care, you may also be able to write off these expenses.
There are many benefits to starting your own business, counting what you can now deduct as part of your new endeavor. Keep clear and precise records and receipts. Make sure you distinct personal from professional expenditures.
Note that deductions often change from every year, and working with a tax expert can make the job easier or using the countless online tools to streamline the procedure.
* Remember that we are not a tax advisor, and your business has its own tax requirements. You should check with your tax consultant to determine what course of action is best for you.