Running a small business is tough, and every dollar counts. Many small business owners miss out on tax deductions that could save money. You want to keep more of your hard-earned dollars, so it’s crucial to know these commonly overlooked deductions. Often, business owners are aware of the big-ticket deductions but miss the smaller ones. For example, home office expenses or business-related travel can add up. Tech costs, such as software subscriptions or phone bills, are another. Even expenses for education and training are deductible. Hiring a CPA in Philadelphia can help you navigate these options. They ensure you claim every possible deduction. Knowing these can ease financial stress and improve your bottom line. Don’t let oversight cost you. Understand these deductions to maximize savings and keep more money in your business. To start, consider these overlooked deductions to keep your business growing strong.
Home Office Deduction
If you work from home, don’t ignore the home office deduction. It’s not just for freelancers. Whether you rent or own your home, you can deduct a portion of expenses like mortgage interest, rent, utilities, and insurance. This deduction helps subsidize the business use of your home. The IRS has guidelines on how to calculate this deduction with precision. Consider using the simplified option, which allows a flat rate deduction based on square footage. To learn more, visit the IRS Home Office Deduction page.
Business Vehicle Use
Your business might depend on a vehicle. You can deduct costs related to business use. This includes gas, repairs, and even depreciation. Keep detailed records for a clear separation between personal and business use. You can choose between the standard mileage rate or actual expenses to calculate deductions. Both methods require thorough documentation. For details, review the guidelines on the IRS Standard Mileage Rates page.
Education and Training
Investing in your knowledge pays off, literally. Expenses for courses, workshops, and conferences related to your business are deductible. This includes tuition, books, and some travel expenses. Staying current with industry trends benefits both you and your business. Keeping receipts and documentation is critical to substantiate these deductions.
Cost of Goods Sold (COGS)
If you sell products, you can deduct the cost of goods sold. This includes the cost of materials and labor directly tied to production. Here’s a simple table to illustrate deductible items:
| Item | Deductible |
| Materials | Yes |
| Labor | Yes |
| Shipping | Yes |
| Storage | Yes |
Tech and Software Costs
Your business likely needs technology to operate efficiently. Software subscriptions, antivirus programs, and cloud services are deductible. These ongoing expenses can add up quickly, so keep track of them. Refer to invoices and receipts for clarity on eligible deductions.
Business-Related Travel
Travel necessary for your business can be deducted. This includes airfare, hotels, meals, and transportation. The key is ensuring the trip’s primary purpose is business. Combining personal travel with business can complicate deductions. Clear documentation is essential here.
Office Supplies and Furniture
Office supplies, from paper to furniture, are deductible. Larger items like desks or chairs can be deducted in full or depreciated over time. Be sure to separate personal and business purchases. Receipts, labeled and filed, will support these deductions come tax time.
Advertising and Marketing Costs
Promoting your business is essential. Whether you buy ads or print brochures, these are deductible expenses. Even small marketing efforts like social media boosting count. Document each expense and its direct link to business operations.
Conclusion
Being aware of these deductions helps you retain more profit. Hiring a professional, like a CPA, offers guidance and peace of mind. They ensure you’re maximizing deductions without stepping into risky territory. By staying informed, organized, and proactive, you help ensure your business thrives financially.