Most Overlooked Tax Deductions for Small Business
The countdown is on. With only one week to go before taxes are due, and American businesses – already burdened by the highest corporate tax rate in the world – are looking for ways to hold on to their hard-earned revenue.
While deductions are important for reducing a business’ taxable income (and by consequence, taxes due), there remain some frequently overlooked deductions for small businesses, reports CBS News. Drawing from a list by Outlook.com CEO Steven Aldrich, here are six commonly missed deductions:
Health care – A health care tax credit of up to 35% is available for small businesses with 10 or fewer employees averaging less than $25,000 a year.
Business vehicle – Using a vehicle exclusively for a small business? Maintenance and fuel costs are deductible in full.
Travel costs – Travel can get expensive, but when out of town on business, all expenses – including transportation, food, and lodging – can be deducted as business expenses.
Home office – If small business owners use a home office, they can deduct the cost of that space, figured as a percentage of overall housing expenses. This includes a portion of Internet and phone bills. A word of caution, however – home office deductions have a reputation for drawing audits.
Career costs – Activities undertaken to maintain or improve one’s career – including classes, training, or membership fees to professional organizations – can be deducted as a business cost.
Retirement planning – Small business tax payers can claim a credit for the first $2,000 invested in a retirement fund.
Read more about often missed small business tax deductions.