10 Tax Deductions You Can Use for Your Business

Last week I talked about deductions, and we covered some of the basics – phone, computer and car. Today, we’re adding to that list with some other deductions that are often overlooked in the rush to create and run a business.

Deduction #1: Labor

If you pay someone for something they do for your business, you have a deduction. You need to also decide if they are paid as casual laborers (temporary workers), employees (with payroll considerations), or independent contractors.

Deduction #2: Insurance

Don’t forget about the cost of insurance such as E & O (error & omissions) and health and disability insurance, provided your plans are in compliance with federal and state regulations requiring you to provide equal insurance to all of your full-time employees.

Deduction #3: Education

Educational expenses related to enhancing your current business are deductible.

Deduction #4: Advisors

Any expenses related to the hiring of advisors to make your business more profitable is tax deductible.

Deduction #5: Auto

If you use your auto for business purposes, you have a lot of choices in how you can take the deduction. There are two ways to take expenses: actual expenses or a mileage allowance. With actual expenses, you need to track expenses, such as gas and oil, tires, repairs, and insurance.

Deduction #6: Websites

The cost of websites and internet marketing is all deductible for your business. Here’s a tip: If you have a new business, get it started first and then incur your programming costs. That way you have current expenses and don’t need to amortize them as start-up costs.

Deduction #7: Promotion

Whether you’re doing PR, advertising, marketing, or promotion, make sure you track all those expenses.

Deduction #8: Office supplies

It’s amazing how many people forget about all the quick little runs to the local office supply store. Remember the cost of supplies is deductible.

Deduction #9: Interest

Have you used your credit cards to fund your business? Then your business is responsible both for paying you back for that and for a reasonable interest rate for the loan. That’s also true if you’ve made an outright loan of cash to your business or contributed items that you haven’t been paid back for. Your business needs to pay you back, plus pay a reasonable interest rate.

Deduction #10: The Finer Things

This is probably the tax deduction everyone wants to have. What is it that you really love to do and that you’re currently buying with after tax dollars? If you have a business purpose for it, you probably have a deduction.

There’s lots more on tax deductions in Smart Business, Stupid Business. Lots. So many that we created a bonus item listing over 1,000 potential tax-saving deductions. You can access it through the members area of our website. Check the back of your copy of Smart Business Stupid Business to find the code and grab your bonus today!