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Directly ahead of tax season this spring, individuals and businesses alike are often scrambling to scrape together important documents–and any evidence that supports legitimate deductions. If you own a small business in particular, here are a few tax deductions to keep in mind before filing in a couple of weeks.
Space is the first and most obvious deduction about which most of the work-from-home crowd have heard by now. If you haven’t, here’s the short version: Home space that is used exclusively for work related to your business endeavors can be claimed as a deduction.
Should you own a more traditional business front, the same goes for rent and utilities in full; it’s similarly worth noting that utilities paid in a home that includes an office may be partially deducted in proportion to the square footage of the space.
Ongoing expenses also warrant deductions, but the expenses themselves have more nuance than one might expect. For example, you can write off software subscriptions and time spent researching or recruiting as long as these things are deemed “necessary” to your business, but items like entertainment or client meals are considered less important (entertainment cannot be deducted, while client meals earn a 50 percent deduction).
Advertising is a special example of this kind of expense as well, provided it was–again–demonstrably necessary to your business’ upkeep and growth.
Meals and travel fare for you and your employees still qualify for deductions, though the latter must include sleep and “traveling away from your central place of work for longer than one ordinary day’s work”, according to Yahoo! Finance. These things also cannot be “extravagant” or personal in nature.
On the note of travel, you can deduct a bit more than $0.65 per mile you drive in a personal vehicle for business purposes, though you might actually net more if you deduct the cost of maintaining said vehicle proportionally to how far you actually drove for business-related activity.
As per usual, employee expenses–including salary, contract pay (as long as it’s over $600 for the year), retirement contributions, insurance, and trainings–are all fully deductible.
Finally, the “bad debt” deduction applies to any situation in which you provided a business loan to a client or colleague and did not receive the money back; you can file for a deduction in the amount of the total lost. While this may sound like a niche option, keep in mind that it also covers customer credit failures.
