Do you own a small business? As an owner, you will definitely love to deduct your taxes to lower various bills and expenses. And you can do these savings from day-to-day expenses actually like car trips, electricity bills, and others. What you only need to do is that you have to report in business accounting records. Here given are some of the options for your small business tax return deductions that you can utilize to lower your bills.
- Are you running a drop-shipping business? If so, then you need to have appointed delivery agents. But, apart from that, you need to deliver the goods. You will be happier to know that the cost for this job is necessary according to the Internal Revenue Service. Postage, delivery charges, and shipping meter subscriptions are all deductible. Deductible charges also include the packaging cost and delivery cost. Materials include boxes, envelopes, packaging material, tapes, markers, labels, print.
- There can be three types of workspace charges that can be deducted from your tax return. For home office expenses to be deducted, you need to meet certain requirements. Your work area should be used for business activities only and for no personal purposes.
You cannot build an alternative workspace or another office somewhere else and the majority of the time you spend in your workspace should be committed to business activities. There are usually two ways by which you can deduct your taxes. In the simplified method, you will get the deduction on a per-square-foot basis while for the regular method, the calculation is based on the percentage of the home’s square footage.
If your home qualifies as a workplace, then you can deductions on utility services like heat, water, electricity. You can get deductions on utility services even in case of renting a coworking space, and that too in a higher amount.
- Do you have a business credit card or small business loan? Then, you can get tax deductions on the payment of interests you have given in a financial year. The same is applicable for the amount that your bank charges for holding a business account.
There are certain types of business accounts on which you will also get tax deductions which include data breach insurance, professional liability insurance, general liability insurance, commercial property insurance. You can write off both premiums and the full amount, subject to the type of insurance you have.
Are you self-employed? Then, you can get deductions on health insurance premiums. According to the Small Business Jobs Act of 2010, you can get a 100% health insurance cost deduction as an adjustment to the taxable income not only for yourself but also for a spouse, dependent relatives, and children who are under 27 years of age.
Well, the list doesn’t end here. You can even get deductions on contributions to your retirement plans which include Simplified Employee Pension, Qualified Plan, and Savings Incentive Match Plan for Employees.
- One of the most interesting facts about small business tax return is that you can deduct costs of appointing a bookkeeper, an accountant, or a small business tax agent from the tax payable.
Deductions are applicable to attorney payments as well. Attorneys are generally hired for various jobs, ranging from preparing contracts, file trademarks, copyrights, or negotiating leases to defending your business in court.
Are you worried about clearing debts? Now, the time has come to eliminate those worries. Because, bad debts like loans to suppliers, credit sales to customers, or business loan guarantees can get written off at the end of the first financial year.
- Are you thinking to hire independent contractors or freelancers for your business? Then, you will get enough tax deduction on the cost of their services. While hiring such a contractor, you should not forget to collect the desired form from the contractor and file the exchange.
- Employees constitute an integral part of any business, be it small or large. They’re the people on whose work ethics, a company stands strongly and so does its future. So, as an owner, you can provide them with a number of benefits, compensations, as well as perks and you, will be happy to hear that, you can get tax deductions on these payments also.
These costs include employee payment, vacation pay (the payment that you give when the employees work during a certain leave period), sick time (the payment that is given to an employee when he/she works during leave taken due to health-related issues). Employees often take life insurance coverage and education coverage for their children, cut from the salaries. And, if you pay for their meals and lodging, those costs will also be covered in the tax deductibles.
- Marketing and branding are of utmost necessity for any company to survive in this highly competitive business world. Most of the marketing costs are spent on the purpose of advertising. Whether you’re branding your company on Instagram or in any local newspaper, you will always get that cost deducted as a tax return.
Digital marketing has set a new trend in the business world and you may have to use certain marketing tools or software. If you use these tools to handle social media campaigning, that cost will also be considered a deductible.
- Designing and maintaining a website is another prerequisite for your business. Clients and customers will easily get to know about products and other services that your business offers, thus making your business acceptable to a large number of people.
Among the website costs, expenses that are required to buy a domain or web hosting are considered deductible. The same is applicable for the cost required purchasing of web design templates or stock images.
- In case you attend special classes that will teach you to grow your business, those expenses are tax-deductible.
- Business travel expenses that are tax-deductible include vehicle costs, accommodation costs, and also meal costs for an overnight trip.
For more details, you should consult with experienced tax agents in Australia. If you’re based in Perth, you can hire a tax agent Perth who can guide you methodically.