As the owner of a small business, you likely know that paying taxes has a considerable impact on your bottom line. Small business tax deductions could make a difference in your taxable income and in your cash flow. These tax deductions are available through the federal government as a way to encourage growth and promote a healthy economy. If you own a business — even as a side gig — you may qualify for one or more of these four surprising small business tax deductions.
1. Business Use of a Vehicle
If you use a vehicle for business-related needs, you may be able to deduct your expenses. The standard Internal Revenue Service allowance is 57.5 cents per mile. This includes the fuel, wear and tear. No special records other than recording mileage are required for you to take advantage of this deduction, but you may wish to keep notes of the purpose of the trip, such as retrieving supplies, meeting with clients, or making a delivery.
2. Contract Laborers
Many small businesses hire contract laborers from time to time. The holiday season is one of the most popular times for a small business to bring on a contract laborer for a few weeks in order to get through the busy seasonal work. You can deduct wages paid to contract laborers so long as you complete the required Form 1099-MISC and provide a copy to the laborer and to the IRS.
3. Business Supplies
From the toner and paper in your company printer to the bubble wrap you use for sending parcels, supplies are tax-deductible. Keep the receipts for the supplies used in your business. Cleaning supplies, office supplies and postage are all eligible for a federal tax deduction.
If you own the building that your business is in, repairs to the property and the building are tax-deductible. If the central air conditioning system goes out and needs a repair or replacement with an equivalent system, you can deduct the repairs. Both labor and materials can be deducted on your federal taxes.
These are just a few of the tax deductions that are available to small business owners. If you need help with your federal tax return, VTax makes tax preparation easy! We give you the option of having your taxes conveniently prepared anywhere, as well as the assurance that your taxes are being completed by credentialed tax professionals. Learn more about VTax and find out how we can save you money on taxes!