Tax Deductions for Small Businesses: Commonly Overlooked Write-Offs

Tax Deductions for Small Businesses: Commonly Overlooked Write-Offs

As a small business owner in Bethesda, Maryland, you are likely focused on growing your business and ensuring its success. However, one area that many business owners tend to overlook is taking advantage of tax deductions. Tax deductions can significantly reduce your taxable income, ultimately saving you money. In this blog post, we will discuss some commonly overlooked tax deductions for small businesses, so you can maximize your tax savings.

tax deductions

1. Home Office Deduction

If you operate your business from a home office, you may be eligible for a home office deduction. This deduction allows you to deduct a portion of your home expenses, such as rent, utilities, and internet costs, based on the square footage of your home office. Many small business owners either don’t know about this deduction or are hesitant to take advantage of it due to fear of triggering an audit. However, as long as you meet the IRS guidelines for a home office, you should not hesitate to claim this deduction.

2. Startup Costs

When starting a new business, there are often significant costs involved, such as for equipment, legal fees, and marketing expenses. You can deduct up to $5,000 in startup costs in the first year of your business, with the remaining costs amortized over the following years. Make sure to keep track of all your startup costs to take advantage of this deduction.

3. Vehicle Expenses

If you use your vehicle for business purposes, you can deduct these expenses on your taxes. This includes gas, maintenance, and insurance costs. You can either deduct the actual expenses or use the standard mileage rate set by the IRS. Be sure to keep detailed records of your business mileage to substantiate your deduction.

4. Professional Services

Whether you hire a bookkeeper, accountant, or lawyer for your business, the fees you pay for these professional services are tax-deductible. These professionals can help you navigate complex tax laws and ensure that you are maximizing your deductions. Don’t forget to include these expenses on your tax return.

5. Education and Training

Investing in education and training for yourself and your employees is not only beneficial for your business but also tax-deductible. You can deduct the costs of workshops, seminars, and online courses that are related to your business. Continuing education can help you stay competitive in your industry while also reducing your tax liability.

6. Health Insurance Premiums

If you are self-employed and pay for your own health insurance, you can deduct these premiums on your tax return. This deduction is especially valuable as health insurance costs continue to rise. Be sure to keep records of your health insurance payments to claim this deduction.

By taking advantage of these commonly overlooked tax deductions, you can reduce your taxable income and save money on your taxes. However, navigating tax laws can be complicated, especially for small business owners. That’s where Apley Capital comes in. We specialize in individual and business tax preparation, helping small business owners in Bethesda, Maryland maximize their tax savings.

For more info or tips on tax preparation, you might also be interested in our blog post on The Top Tax Deductions Every Small Business Owner Should be Aware Of.

If you need help with your tax preparation or bookkeeping, don’t hesitate to contact us. We are here to assist you with all your tax and financial needs.