The Most Forgotten Tax Deductions Business Owners Should Take

Author Frank Ali

Posted Mar 19, 2023

Reads 4.3K

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As a business owner, you're always looking for ways to save money and maximize profits. One area that is often overlooked is tax deductions. There are many forgotten tax deductions business owners should take advantage of that can have a big impact on their clients' bottom lines. By focusing on the low-hanging fruit first – simple easy deductions – you can create a power list of underused write-offs and increase your tax savings.

Tax deduction strategies for business owners should include thinking outside the box when it comes to expenses that can be written off. For example, did you know that technology electronic equipment such as computers and software can be deducted from your taxes? This deduction can add up quickly if you have multiple employees who require these tools to do their jobs effectively. It's important to keep track of all your expenses throughout the year so you don't miss out on any potential tax savings.

Technology, electronic equipment and supplies

If you are a business owner who uses electronics tech such as phones, computers, laptops, drones, cameras, iPads, speakers, and video cameras for work purposes, then you may be eligible for big write-offs on your tax returns. In fact, many electronic equipment and supplies can be fully expensed or written off as 100 percent deductions.

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However, it's important to note that if you use these electronics tech items for both work and personal reasons, then you can only deduct the percentage of time they are used for business purposes. For example, if you use your laptop 80 percent of the time for work and 20 percent of the time for personal reasons, then you can deduct 80 percent of the cost as a business expense. Don't miss out on these potential savings by believing in corp fairy tales about what is and isn't deductible - do your research and claim all applicable deductions!

Mark Cuban's Grocery Store Hack Will Help You Score Cheaper Produce

Billionaire talked about his grocery store hack on Twitter, and it's a game-changer for anyone looking to save money on produce. In the early days of starting his own business, he was always looking for ways to cut costs while still maintaining quality products. That's when he stumbled upon this trick.

YouTube video about Mark Cuban's Grocery Store Hack Will Help You Score Cheaper Produce

According to Emily Rella from Entrepreneur, all you have to do is ask the produce manager at your local grocery store if they have any "ripe-but-not-too-ripe" fruits and vegetables that they need to get rid of before they go bad. The manager will usually offer these items at a discounted price, saving you money while also reducing food waste. Cuban successfully copied this link and has been using it ever since.

In addition to saving money, buying slightly overripe produce can actually be beneficial for your health. Fruits and vegetables that are past their prime may contain more antioxidants than their younger counterparts. So not only are you helping out your wallet, but you're also doing something good for your body. Next time you're at the grocery store, try asking about these discounted items and see how much you can save!

Cutting Down Expenses: Starting Your Business with Ease

Starting a business can be an overwhelming task, especially when it comes to the costs involved. However, there are ways to cut down on expenses and make the process easier. One of the forgotten tax deductions business owners should consider is startup costs.

Money Used for Bills Payment

Startup costs include both organizational costs and generally capital expenditures. Organizational costs are those related to creating a legal entity for your business, such as forming a limited liability company (LLC). These costs include legal and professional fees for filing paperwork and setting up your business legal entity.

Separating start-up costs from active trade expenses is important because these costs cannot be deducted until your business begins operations. However, they can still provide valuable tax deductions in the long run. By taking advantage of these deductions, you can reduce your overall business start-up expenses and help ensure that your new venture gets off to a strong financial start.

Managing Small Expenses: Understanding Petty Cash Expenses

Petty cash is a term used to describe small items or purchases made in the course of running a business. These expenses are usually paid for in cash, and they can be anything from paying for coffee during an office meeting to tolls capturing while on a business trip. While small expenses like these may not seem significant, they can add up to big tax savings over time.

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For retail businesses, petty cash is often used to make change or handle small purchases. However, non-retail businesses also have their fair share of small expenditures that can be easily forgotten when it comes time to file taxes. That's why it's important to keep good records of all petty cash transactions by using petty cash vouchers that include the time, date and amount of each transaction.

To properly manage your petty cash expenses, you need an accounting system that allows you to track and monitor each month's input of small expense transactions. This system should provide you with detailed reports that break down all the taxable income spent on these small items so that you can claim them as tax deductions later on. By keeping accurate records and understanding how your petty cash expenses impact your bottom line, you'll be able to take advantage of every possible tax deduction available to you as a business owner.

Cutting Costs on Document Preparation

As a business owner, you may have incurred document preparation costs when creating your business plan, loan application, or printing other necessary documents. While it's important to have professional help from a consultant attorney or accountant when preparing these documents, the costs can add up quickly. To cut down on these expenses, consider doing some of the work yourself or utilizing online resources to save money.

Woman Slicing Gourd

When preparing your business plan or financial data for investors, it may be tempting to hire a professional to handle everything. However, many of these fees are actually deductible professional fees that can be claimed on your taxes. The same goes for legal fees paid in connection with buying business assets or settling disputes. By keeping track of these expenses and reporting them properly, you can save money come tax season.

Lastly, it's important to remember that not all work done by your consultant attorney or accountant is strictly related to your business. If they complete any personal work for you in addition to their business duties, those fees should not be included as part of your deductible professional fees. Be sure to keep personal matters separate from your business affairs and report only the necessary expenses on both your personal and business tax returns (which includes schedules). By being aware of where you can cut costs and what expenses are actually deductible, you can save money on document preparation while still receiving top-notch professional help.

The Collapse of Credit Suisse: A Cautionary Tale of Resistance to Hybrid Work

The downfall of Credit Suisse serves as a cautionary tale for business leaders in our changing world. The resistance to hybrid work, where employees can choose to work from home or the office, led to a culture of micromanagement and mistrust within the company. As Gleb Tsipursky states in his article for Forbes, "Credit Suisse's failure shows that leaders who stick their heads in the sand and ignore this trend (hybrid work) will likely see their organizations fall behind."

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The lesson here is clear- adapt or risk being left behind. Business owners must be willing to embrace new technologies and ways of working if they want to remain competitive in today's market. By allowing for hybrid work, companies can offer employees greater flexibility and autonomy, which often leads to increased productivity and job satisfaction. It's time for business leaders to learn from Credit Suisse's mistakes and start acknowledging the benefits of hybrid work before it's too late.

Frequently Asked Questions

What are the top 16 small business tax deductions?

The top 16 small business tax deductions include expenses related to home office, travel, equipment, insurance, and retirement plans. These deductions can help reduce taxable income and lower the amount owed to the IRS. For a full list of eligible deductions, consult with a tax professional or refer to the IRS website.

Are itemized deductions Taxable?

No, itemized deductions are not taxable as they are subtracted from your taxable income to lower your overall tax liability.

How much can I deduct from my business?

The amount you can deduct from your business depends on the expenses that are necessary and ordinary for your type of business. Keep accurate records and consult with a tax professional to ensure maximum deductions.

How much sales tax can I write off?

The amount of sales tax you can write off depends on your state's tax laws and whether you choose to itemize deductions on your tax return. Check with a tax professional for specific guidance.

What can I deduct as a business expense?

You can deduct expenses that are ordinary and necessary for running your business, such as rent, utilities, supplies, and employee salaries. However, personal expenses or expenses that are not directly related to your business cannot be deducted.

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Frank Ali

Writer at Inside Business

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Frank Ali is a seasoned writer with over a decade of experience in the field. He has worked for various publications, covering topics ranging from technology to pop culture. Frank has a keen eye for detail and is passionate about storytelling.

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