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Practical Small Business Tax Deductions For The Upcoming Tax Season

As the new year rolls on, small business owners are painfully aware that tax season is here. Many business owners enjoyed tax breaks and other program incentives during the pandemic. However, as these advantages wind down, finances are returning to normal despite inflationary concerns. 

The most important date for a small business to remember is the filing due date. The deadline for most small businesses (household employers, C corporations, sole proprietaries, etc.) is April 18, 2022. The filing deadline for partnerships and S corporation taxes is March 15, 2022. Remember, if you don’t register your small business as a specific type of small business, you’re a sole proprietary business by default.

The filing deadline aside, your small business might require the professional services of a CPA firm. Peter B. Scala, CPA and the team are experts at tax preparation. As accountants, they will examine your small business tax records and determine the best small business tax deductions. 

The Best Small Business Tax Deductions

When filing your small business taxes, it helps to have a team of accountants on your side that understand the complicated IRS tax codes. To get the best small business tax deductions, it is crucial that small businesses keep impeccable records of all expenditures. Also, don’t wait until the last minute. Call Peter B. Scala, CPA today and get your small business taxes taken care of. 

What are some potential tax deductions for the upcoming season? 

Home Office Expenditures

As the pandemic eases, many who own small businesses are getting back to something close to normal business operations. For a large number of us, this means we aren’t going back to the office. Instead, we will continue working from home and use office equipment and supplies to do what we once did in our offices.

The IRS created simplified instructions on what can be deducted for office expenditures. Accordingly, home-based businesses and freelancers can deduct 5 dollars for each square foot (up to 300 maximum) used for workspace. To get the deduction it must be a dedicated workspace. For instance, you can’t claim the kitchen table area because you do part of your work there. It’s deductions like these that professional accountants like Peter B. Scala, CPA, routinely look for.

Office supplies can also be deducted from your taxes. This includes pens, paper, printers, ink, etc., anything that you needed to run your business. The catch is you must use the items within a year of purchasing them. If you run an eCommerce business that does lots of shipping and handling, the postage is deductible. Of course, you must have proof of all these expenses so keep all receipts and other documentation for filing purposes.

Another home office expenditure that might be tax-deductible is internet and phone use. They must be vital to the functioning of the business and cannot be comingled with personal internet and phone use. If not, you can still take a partial deduction. You’ll need detailed documentation that shows how you divide the services.

Calling Peter B. Scala, CPA, and their team of accountants can help you figure out how to take these and other small business tax deductions.      

Professional Services

Your small business can deduct some professional service expenses such as accounting and legal services. Professional services must be necessary for running your business for the deductions to be legitimate. Any accounting and bookkeeping software you purchased for your business is also tax-deductible. 

There are other less-obvious professional service expense deductions that you may not be aware of. To this end, hiring a CPA firm that knows the tax laws is the best way to maximize tax deductions. For more information about this topic, the IRS has specific guidelines

Business Insurance

Business insurance is a necessity, and you can deduct the costs from your taxes. The business insurance write-off is particularly helpful for sole proprietary type businesses because many operate out of a home office. Because of this, you could be eligible to take a home renter’s insurance deduction as part of your business office write-offs. 

Business Travel and Meals

Business travel and meal tax deductions are already well-known to most people. Thus, it is common knowledge that you should keep receipts from things like business meals and car rentals. Business-related meals are a 50% deduction, but you need proof of the business relationship.

If you need to travel for your business, all those expenses are deductible. This includes airfare, rental car fees, tips, hotels, and much more. Even the most mundane purchase can be a travel expense. But, the small business owner must keep impeccable records. Additionally, hiring a tax expert that understands the complicated nature of these types of deductions is the best way to maximize your deductions.  

Lean and Green

There’s been a big push in recent years to “go green” in our professional and private lives. Going green is the broad term for installing and using things that don’t harm the environment. Home business owners can take a 30% business tax deduction if they’ve installed alternative energy-efficient heating and cooling in the home. Alternative energy includes solar and wind. For comprehensive information on this topic, the IRS published a guide that helps home business owners take advantage of this deduction. 

Maximize the 100% Deductions

There are several deductions that apply to small businesses that are 100% write-offs. When you hire Peter B. Scala, CPA, and team to do your business taxes, you get experts that know how to maximize those valuable deductions.

Closing Comments

The tax filing deadline will be here before we know it. As a small home business, it pays to have help filing your taxes and finding those hidden deductions. There are many deductions that cross over between home and private life that if applied could save your business money. From obscure business travel and meal expenses to minor office supplies, hiring a team of professional accountants from Peter B. Scala, CPA, is the best solution for filing your business taxes.

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