70+ TAX DEDUCTIONS & CREDIT FOR BUSINESS OWNERS

Written By Candace Galiffa

The number one question I get from entrepreneurs (who typically have just been slammed with a large tax bill) is this: What one strategy should I implement to reduce my tax liability? 

Luckily, it’s a simple answer.

The most important step in successful tax planning is keeping up with your record keeping.

Not the super glamorous answer you wanted, is it?

But it’s necessary to have a system in place to track your income and spending month to month. You can do this on your own with a simple spreadsheet or bookkeeping software, or you can outsource it to an accountant. But at the end of the day, a system needs to be in place!

So, the next question is, “Well, what can I write off?  What is even counted as a business expense?”  Problem solved! 

Check out this list of possible tax deductions and credits for entrepreneurs!

PROFESSIONAL FEES

1. Accounting Fees
2. Advertising
3. Banking fees
4. Business association membership dues
5. Collection expenses
6. Commissions to affiliates
7. Consulting fees
8. Continuing education for yourself to maintain licensing and improve skills
9. Conventions and trade shows
10. Credit card merchant service fees
11. Franchise fees
12. Investment advice and fees
13. Website design
14. Legal fees
15. License fees
16. Social media advertising
17. Software and online services
18. YouTube channel
19. Research and development
20. Royalties

OFFICE EXPENSES

1. Building repairs and maintenance
2. Cleaning/janitorial services
3. Cameras
4. Computers and tech supplies
5. Furniture or fixtures
6. Home office (Learn more)
7. Safe-deposit box
8. Property taxes
9. Maintenance and Janitorial
10. Mortgage interest on business property
11. Moving
12. Newspapers and magazines
13. Office supplies and expenses
14. Rent
15. Storage rental
16. Telephone
17. Utilities
18. Internet hosting and services

EMPLOYEES & CONTRACTORS

1. Wages and salaries paid to employees
2. Workers’ compensation insurance
3. Education and training for employees
4. Health insurance
5. Health Savings Account
6. Retirement plans
7. Payroll taxes for employees (including Social Security, Medicare, and unemployment taxes)
8. Pension plans
9. Subcontractors

AUTO & TRAVEL EXPENSES

1. Auto expenses (Learn more)
2. Business travel
3. Leased vehicle or equipment
4. Parking and tolls

SUPPLIES & MATERIALS

1. Costs of goods sold
2. Depreciation (Learn more)
3. Drones
4. Equipment (Learn more)
5. Freight or shipping costs
6. Equipment repairs
7. Losses due to theft
8. Materials
9. Video equipment for business

OTHER EXPENSES

1. Charitable deductions made for a business purpose
2. Child Tax Credit (Learn more)
3. Earned Income Tax Credit (Learn more)
4. Exhibits for publicity
5. Gifts for customers (Learn more)
6. Postage
7. Prizes for contests
8. Rebates on sales
9. Interest
10. IRA contributions (Learn more)
11. Sales tax
12. Meals (Learn more)

Unfortunately, there isn’t a master list of deductions included in the Internal Revenue Code or provided by the IRS. There is simply the tax principle which states a valid write-off is any expense incurred in the production of income.  And of course, each deduction then has its own set of rules.

That’s why bookkeeping is my number 1 strategy to save money on your taxes!

The moral of the story is to track every single expense related to your business and review them with your CPA to ensure they are legitimate deductions and credits. The key here is to make sure you have good record keeping and consistent bookkeeping to minimize your tax liability, as well as your risk of an audit if the IRS ever comes knocking.