The saying goes there are only two things certain in life – death and taxes. It is difficult to find anyone who likes thinking about either. While you cannot do anything about death, you can certainly find ways to, at least, lower the taxes you need to pay to the government. As a small business owner you have number of things to worry about and keeping track of all the possible tax deductions you can take should not be one of them. This is what you hire accountants and financial planners for. However, it is your responsibility to understand what taxes your small business can claim so that you can plan your expenses accordingly. Below we discuss three tax deductions many small business owners usually forget to pay attention to. Study them to ensure you don’t overpay your taxes.
Home Office
The tax deductions relating to a home office can be significant, but it is one of the most overlooked. Over half of all small business owners operate out of their homes, but less than one-third of sole proprietors claim a home office deduction. Some people believe it raises a red flag for an audit, but as long as you are entitled to claiming the space, meaning that you use the space regularly and exclusively for business and that space is an acceptable place from which to operate your business, there is nothing to worry about.Moreover, it doesn’t have to mean a room of its own. If you operate online with cloud-based storage and simply set up a desk in the corner of your den and use that area solely for business, you can count it towards tax deduction. Deduct the expenses attributed to your home office area as well as any office supplies, furniture, or other equipment (e.g. printer) that you use solely for work.
