When you own a business, whether it is a small home-based business, a medium-sized retail business, or a large corporation, you will need to focus on your taxes. Failing to file and pay your taxes on time could mean penalties and a possible audit from the IRS, which nobody wants to deal with. However, you should also be aware of deductions for your taxes, as certain expenses will actually save you money when tax season comes around.
The first type of expense you might be able to deduct from your business taxes is with transportation. If you have your own vehicle that is used for business purposes, such as meeting clients, going to the post office, or picking up office supplies, part of the auto costs can be deducted. Keep track of the miles you travel when you are going on these business errands or other business trips. Also keep track of expenses related to your vehicle, including gas and auto repairs. Bring all of this information to your accountant and they will calculate the total deductions for you.
Marketing and Operation Expenses
The cost of starting your business can also be included in your deductions. For example, when you purchase your website's domain name and hosting, that can be deducted, as well as the price you pay for web design. Business supplies like business cards, custom letterhead, and shipping supplies you need to purchase can be deducted. Also consider what you have spend on marketing your business, whether it is attending local trade shows or online advertising through various sources. Make sure you save receipts and documentation for all of these expenses so that you can deduct them.
Home Office Expenses
Expenses that are related to conducting business out of your home can also be included in your tax deductions. For example, part of the money you pay for rent or mortgage can be deducted from your taxes when you have an office space in your home. You will also be able to deduct part of your home's utilities, since you likely use the phone and Internet service for business, along with the lights and electricity in your office. If you have purchased office furniture or computer equipment for the home-based business, those receipts should also be saved as they become potential expenses.
Make sure you save all your receipts throughout the year so that you can deduct your business expenses. For more information about tax planning, contact a company like Karla Dennis and Associates.