Are You Claiming Everything You Can?

Author: Lani Coggins

Every business owner knows there are only two ways to improve your bottom line: generating revenue and reducing expenses. Taxes are a business expense – likely your single-highest cost each year – so you want to do everything possible to maximize your tax deductions.

Fortunately, there’s still plenty of time left to get better organized for the 2012 tax year.

Organization is the key. If you plan ahead, you’ll be well-prepared to capture all important tax deductions that apply to your home business. Here are some things to think about:

Save your receipts. A $100 business expense could equal as much as a $50 tax deduction. Need we say more? But if you’re audited, you’ll have to prove your claims, so receipts are critical. Knowing in advance what tax deductions you’re allowed helps you know which receipts to save. The best advice? Save all of them.

You can file your paper receipts, or use special software or even online applications to track expenses. As long as you’re organized, tax deductions won’t just fall through the cracks.

Of course you should always consult a professional for detailed tax planning advice, especially to understand the opportunities and limitations of each type of deduction. But here are some specific potential savings you may not be exploiting for your home business:

• Startup expenses, if it’s your first year in business and you’re not making money yet.
• Office supplies and equipment.
• Home office expenses, based on the percentage of space allotted to your office, including rent or mortgage payment, utilities, communications, insurance, property taxes, security, etc.
• Research and education expenses.
• Mileage and other auto and travel expenses.
• Health insurance premiums.
• Moving expenses, whether you move your home or move your office from home to an independent office space.

Are you claiming everything you can? Contact a tax professional now, rather than waiting till tax time when it’s too late. Our experts here at The Tax Office Inc. can help assess your situation and advise you on how to capture all tax deductions available to your home business.