Don't Miss Out on These Deductions!
Author: Keith Huggett
Small business owners are usually busy running their businesses and don't have a lot of time to spend worrying about tax strategy. If you're like a lot of do-it-yourself small business owners, you're probably forgetting to take some of these five, often-missed tax deductions:
- Start-up expenses: The first money you spend on your business is also your first deduction. The IRS lets you write off up to $5,000 in start-up expenses in your first year and lets you amortize anything over that amount over a period of 15 years. The IRS defines start-up expenses relatively liberally and lets you write off not just your DBA filing or the legal costs for your articles of incorporation, but also the cost of market surveys, advertising to announce your business and the like.
- Education: Money that you spend on education that is directly related to your business can be tax deductible. While you are safe writing off money you spend on legally required continuing education, other work-related training can also be a tax deduction.
- Depreciation on Home Offices. While home office tax deductions are generally red flags for IRS audits, a legitimate home office deduction can be valuable. When you write off your home office, remember to also deduct depreciation on the portion of your home you use as an office.
- Cell phones: Your cell phone expenses are deductible. If you split your cell phone between personal and business uses, just write off the proportionate share for your business use.
- Loss carryback and carryforwards: If your tax deductions add up to so much that your business ends up with a loss, don't worry. The IRS will let you either carry the loss back and apply it to previous profits, or carry it forward for use against future profits.
