10 Tax Deductions for Small Businesses and the Self-Employed

small business tax deductions

You’ve heard the expression “leaving money on the table,” right?

It means you’re not getting as much money as you could.

And it’s unfortunately what a lot of small businesses do when they don’t get all of the tax breaks that they’re eligible for. This is money that can be put right back into your business to help it grow and prosper.

Below is a quick overview of tax breaks for small businesses.

Are You Taking Advantage of These Tax Deductions?

1. Self-Employment Tax

When working for an employer, they pay a certain percentage of Social Security and Medicare tax. When self-employed, you can deduct this same percentage.

More information: https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

2. Retirement Savings

You may deduct any contributions made to a retirement plan for yourself and to your employees’ plans.

More information: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit

3. Self-Employed Health Insurance Deduction

There are certain qualifications that must be met for this one. But with health insurance being one of the largest business expenses, it’s worth looking into.

More information: https://turbotax.intuit.com/tax-tools/tax-tips/Self-Employment-Taxes/Deducting-Health-Insurance-Premiums-If-You-re-Self-Employed/INF12128.html

4. Advertising & Promotion Costs

Anything used to promote your business, from business cards to website development, may be deducted on your tax return.

More information: https://www.thebalance.com/what-business-advertising-expenses-are-deductible-398945

5. Vehicle-related Expenses

A business can only deduct portions of these costs that are directly attributable to the company, not personal use vehicles.

More information: https://www.irs.gov/newsroom/car-and-truck-expense-deduction-reminders

6. Insurance Premiums

Any business-related insurance premiums (excluding health insurance, which is counted separately – see #3), can be deducted.

More information: https://www.irs.gov/publications/p535/ch06.html

7. Legal & Professional Service Fees

A small business can deduct payments made to lawyers and accountants.

More information: https://www.forbes.com/sites/robertwood/2015/03/19/which-legal-fees-can-you-deduct-on-your-taxes/#67e25f2853f0

8. Home Office Deductions

A “home office” is the space in your home that you designate for office use only.

More information: https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

9. Office Supplies

From writing pens to a new computer, any supply bought and used in the tax year can be deducted.

More information: https://www.thebalance.com/office-expenses-supplies-taxes-398957

10. Taxes & Licenses

Any business licenses purchased, or taxes on things such as business real estate, may qualify for a deduction.

More information: http://finance.zacks.com/can-deduct-professional-license-taxes-2966.html

And there you have it. A list of tax breaks for your small business that are not to be missed! As tax season looms closer, review it carefully to make sure you don’t leave any money on the table.

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