As a business owner, have you ever wondered what your tax write-offs are and how they really work? Do you think write-offs are something that benefits your business but the government pays you back for it? If so, I’m here to tell you what a write-off is and all about the biggest write-offs for your business!
A write-off is a business expense used to reduce your taxable income. A write-off, tax write-off or a tax deduction are all the same thing. When you buy something for your business, you are able to deduct it from your taxable income. The IRS says that a deduction is allowed for ordinary and necessary business expenses paid in the taxable year.
Often I see business owners overpaying in taxes because they aren’t taking some of the biggest tax write-offs available.
Watch this week’s video to learn more!
Are you missing out on big tax write-offs?
As a business owner, these are common write offs you might be missing out on!
- Start-up Fees – Most business owners are paying out of pocket for their initial start up because they haven’t made money from the business yet. You can deduct those fees when it comes time to file your taxes.
- Working From Home – Whether you fully work from your home office or use an area to store inventory, you can write-off many home expenses. Your mortgage or rent payment, utilities, insurance, maintenance, and repairs are all likely write offs.
- Cell Phone Expenses – You use your cell phone for calls, emails, and text messages for your business. You can deduct the amount of your phone and monthly service based on how much you are using it for business purposes.
- Miles Driven – Keep track of your business miles driven for more tax deductions. For example, driving to the store for supplies or to meet with a client count as business miles driven. Check out apps like MileIQ or the QBO app to help keep track of how much driving you do for your business.
- Travel Expenses – An out of town conference or seminar are deductible expenses! Any lodging, car rental, flight costs, or other related expenses during your business trip count as write-offs. Now, adding on personal time to your business trip is fine, however any extra activities or time traveling would not be eligible for deductions.
- Retirement Contributions – Every penny that you contribute to your employee’s 401k accounts is a write off. This is the most commonly missed deduction because it requires planning and guidance from your CPA.
Now that I’ve given you a few helpful tips, you will be able to pay closer attention and track your tax 2021 tax write-offs!
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