Reposted as a reminder as 4-15 is near!
1. Home Office Expenses
If you have a home office, the cost of setting it up may be fully tax deductible. The current simplified rate is $5 per square foot, up to $1,500 (or, you can do the math of home office square footage ÷ total home square footage + a wide range of other home expenses). The space has to be fully dedicated to your work, of course, but if your office is all business, this could save you quite a bit of money.
2. Startup Costs
Before you officially opened for business, you likely racked up quite a few bills in startup costs. You can typically deduct $5,000 in your debut year, and the rest has to be deducted in equal portions over the next 15 years.
3. Bad Debts
If someone skips on the bill, you may be inclined to forget all about it. Don’t. Add up your total for unpaid services, and potentially write it off at the end of the year as unpaid debts. You may not have been paid when you should’ve been, but you might save a little during tax season.
The cost of gas can add up if you travel for work. Fortunately, you can factor this into your taxes, as well. GoolePlay.com and Apple’s App Store have many options for logging mileage. If you’re old school, keep a small notepad in your glove compartment to keep track of how many miles you drive for business purposes.
Either way, you can multiply that number by the government’s going rate (the rate in 2014 was 56 cents per mile, for instance) to see your potential mileage deduction. Add tolls and parking fees and you’re all set.
5. Travel Costs
While you’re away, make sure you log any costs associated with your trip. Lodging, airfare and most other costs you incur on the way (taxis, laundry services, etc.) are usually 100 percent deductible, while food is 50 percent deductible.
A bonus point: when you’re back home, business lunches are also 50 percent deductible, so save those receipts.
6. Credit Card Interest
If you occasionally use credit cards for business expenses, don’t forget to keep track of the interest paid on your purchases. It can typically be deducted from your taxes, as well. This also applies to interest on business-related personal loans.
7. Insurance Premiums
If you’re the boss and you’re paying your insurance costs out-of-pocket, these too are often fully deductible. You can only take advantage of this if you aren’t eligible for any other coverage (i.e., your spouse’s insurance policy), and if the deduction is less than your business’ net profit.
8. Social Security
By law, business owners pay half of the Social Security contribution and employees pay the other half. On the bright side, your half of the total can generally be written off come tax season.
9. Education Expenses
Continuing education courses can be expensive, but if they’re for the sake of your business, you can commonly deduct the full cost from your taxes. Only new or improved skills for your current occupation qualify.
10. Telephone Charges
It’s not going to be any fun, but break out your highlighter and your telephone bill and add up all of your work-related phone calls. Translate that into a percentage of your total phone calls, and you can typically deduct that amount from your annual phone charges.
There are, of course, plenty of other ways you can save on your taxes. It may take a little research and a meeting with a professional tax preparer, but if you look into often-missed tax breaks you could save yourself quite a bit of cash.
Tax laws and tax rules are constantly being updated and interpreted. This article contains general information, so please discuss your individual situation with a trusted tax adviser before making tax decisions.