Some Commonly Overlooked Small Business Deductions

Posted by Bruce Mc on Apr 6, 2009 in Deductions, Form 1040 Information, Opinions, Schedule C, Tax Preparation, Things forgotten | 1 comment

Written by: Courtney Phillips

In the current economic climate, it is no surprise that people are looking for ways to save on their taxes.  Over the last several years, many people have begun to telecommute, freelance, or work from home.  These people often do not realize that there are many things that can be deducted from taxes as an independent contractor.  Other small business owners may not realize what is deductible and what is not. 

Whether you do your taxes on your own or use a tax professional to help you through the filing process, look into whether or not some of the following commonly overlooked small business deductions apply to your situation.

Office Space – If you have a dedicated office space in your home, you may be able to deduct the value of the square footage.  There are some requirements that your office must meet, like being strictly used for business purposes.

Gift Deductions – Perhaps you have donated goods or services at some point throughout the last tax year.  These gifts are often tax-deductible, so keep track of donations and gifts.

Office Supplies – Office supplies that are necessary to the functionality of your office and business can be tax-deductible.  Make sure that you keep meticulous records of what you purchase for your office so that money can be accounted for later on down the road.

Communications – Office lines, dedicated cell phones, fax lines, and internet connections may all be tax-deductible, depending on your situation.  These types of services are often necessary for operating a successful business and can give you a much-needed break come tax time.

Equipment – Purchasing new office equipment and other items needed to perform the tasks related to your business are generally tax-deductible as well.  If you need to buy external hard drives, printers, or other hardware, keep track of your spending.

Professional Organizations, Memberships, and Fees – These things are all commonly overlooked tax deductions.  If you belong to a particular group, subscribe to a trade journal, or keep memberships in order to meet with and entertain clients, you may be able to deduct these expenses as well. 

Talk with a tax professional, like Bruce or visit www.irs.gov for more information regarding tax guidelines for business deductions.

This post was contributed by Courtney Phillips, who writes about how to obtain bachelors degree online (Bachelors Degree Online). She invites and welcomes your feedback at CourtneyPhillips80 at gmail.com

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