You know that a portion of your income will be used to pay taxes, no matter what field you are in. Every small business must manage this debt. Knowing what small business tax deductions you can use to improve your financial situation is important. Consult a professional tax advisor before making major changes to your personal or business tax strategy. These four common deductions are a great place to start your next discussion.
1. Self-Employment tax deduction
Social Security and Medicare are taxes that every worker must pay. They are also known as Federal Insurance Contribution Act or payroll taxes. The total amount due is divided between the employer and employee.
Self-employed people are responsible for both parts of the tax. It can be a costly affair, as Social Security costs 12.4% and Medicare 2.9% of the gross salary.
It’s impossible to avoid double dipping. Kelly Phillips Erb, a Forbes senior contributor, highlighted a simple deduction that could reduce the cost. You can deduct half of your payroll taxes on line 27 of your personal return. You can reduce your personal tax burden by paying your FICA taxes.
2. Rent Deduction
Most small businesses choose to rent instead of buy space. It is common for small businesses to rent space rather than purchase it. Small Business Trends explains that you can deduct the costs of leasing any business space when filing your taxes.
It’s not just your primary facility or workplace. Rent costs for a separate storefront and workshop are both fully deductible if your business has them.
3. Vehicle Tax Deduction
Some small businesses cannot function without a car. Others need a truck or van. Tracking your vehicle use can help you save money on taxes, no matter what kind of vehicle you drive for business.
You have two choices for calculating the small business tax deduction based on your mileage and other expenses. You can record all costs associated with the vehicle from repairs to oil changes. You can also track the mileage using the IRS standard per-mile rate, which is $0.58.
The mileage deduction is a popular choice for small business owners because it’s easier. Keep a record of all travel expenses, but not other documents and bills.
You can use your personal vehicle for business purposes. However, only the miles directly related to your company can be deducted. This excludes the commute to and from your workplace at the start and end of every day.
4. Repair and Maintenance Tax Deduction
Repairs can be expensive and unplanned. All kinds of maintenance will eventually be required. Dave Ramsey, a financial advisor, reminded that all repair and maintenance expenses are deductible from business taxes.
Funding for Business Growth
Small Business Tax Deductions will help you save money and retain more cash. Tax savings alone are not enough to fund major projects or seize a great opportunity.
QuickBridge makes funding smarter. We provide fast short-term funding, including tax debt loans tailored to your needs. Our loan specialists can help you get the money that you need to upgrade your equipment, property or other expenses.
QuickBridge can help you access the funds that your business needs to grow and prosper. Contact us to find out more about our secure, fast and affordable lending options.
