7 Small Business Tax Deductions to Save Money for Your Business

small business tax deductions

When you are running a small business, every action undertaken to save tax is time well spent. Maximizing tax deductions is another way through which you save money. While some expenses aren’t deductible, there are a number of claims that will lower the amount that you will have to pay to the government. Here are some of the small business tax deductions that will definitely lower some of the stress of running a fledgling small business:


Home Office Deduction

You may be able to deduct expenses if you use your home as your office space. To be able to claim this tax deduction, the two basic requisites that are mandatory are the regular and exclusive use of the home space which is also your principal place of business.

This particular tax deduction also offers a simplified option wherein you can simply multiply the prearranged rate by the government with the permissible square footage of the office in place of determining actual expenses by the firm.


Moving Expenses

The laws permit you to save tax on your relocation expenses if your moving is directly related to starting a new job or when you are relocating your business to a different place from for your current establishment.

To be able to claim this small businesses tax deduction, your new work location should be considered far from your old work place and also, you will have to start working at your new office within a specified amount of time permitted by the IRS.


Educational Expenses

You can save up to $4,000 if you are spending money on educating or training your employee. You shouldn’t miss this tax saving technique as IRS gives a lot of freedom pertaining to this particular tax deduction.


Telephone and Internet Expenses

You will have to be careful with this particular tax deduction as you need to constantly log your work related calls made from your personal phone.

If you use your phone and internet for both private and professional use, you can claim this deduction. It may be a little cumbersome to maintain the data, but it is definitely worth your time as it will save you a lot of money.


Auto Expenses

You can even deduct your auto expenses if you are using your vehicle for business related purposes. Again, this particular tax deduction also required a lot of number crunching and logging.

You can categorize your auto usage in two parts: business related and personal, and then claim the tax deduction in accordance with the rules of IRS. To make your life better, there are now apps like MileIQHurdlr and QuickBooks Self-Employed that help you in this categorization.


Energy Expenses

Believe it or not, electricity, heat, and even water like amenities that your business needs and uses every day are also tax deductible.

Furthermore, if your business is utilizing solar energy, tidal energy, or any environmentally cleaner energy, then you can qualify for Business Energy Investment Tax Credit. This will further help you in saving money on small business tax deductions.


Insurance Expenses

To encourage business owners to insure their business, IRS has made provisions to save tax on most business related insurances like employees’ health insurance, equipment insurance, and liability insurance, among others.


Small business tax deductions can be a bane because of all the necessary data management and logging that you will have to do, but these tax deductions can keep you afloat. So make sure you learn what deductions you can and can’t apply for before you begin excluding them from taxable income.


About Sreeram Sreenivasan

Sreeram Sreenivasan is the Founder of Ubiq, a business dashboard & reporting platform for small & medium businesses. Ubiq makes it easy to build business dashboards & reports for your business. Try it for free today!