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The Top Tax Deductions for Your Small Business

Just like an individual, businesses are subject to a whole range of taxes, some easier to understand than others. Each month, Business Tax Insider gives you key tax-saving strategies. 85–866, § 5, added subsec. And redesignated former subsec. 86–779, § 8, added subsec.


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To as to , respectively, and struck out former subpar. Relating to an exemption to the term “applicable employee remuneration” and former subpar. Relating to the term “applicable employee remuneration”. 115–97, § 13311, struck out “in excess of $3,000” after “income tax purposes” in concluding provisions.

Meals with clients and business travel are deductible, but meals included with entertainment may not be. Not taking advantage of contributions to retirement accounts to increase tax-deductible contributions. Qualifying expenses include tuition, fee payments and required books or supplies for post-secondary education for yourself, spouse or dependent child. Trips to your doctor’s office or hospital appointments qualify for medical mileage.

If you purchase health, vision, dental insurance, or long-term care for yourself and your family, you may be able to deduct a portion of the premiums you pay. But remember, as always, to keep an accurate record of the moving costs so you can justify this deduction. This record should include the amount, date, moving company, and what was moved.

Within each taxable year for living expenses shall not be deductible for income tax purposes in excess of $3,000. Paragraph shall not apply to any in-house expenditures for any taxable year if such expenditures do not exceed $2,000. In determining whether a taxpayer exceeds the $2,000 limit under this clause, there shall not be taken into account overhead costs otherwise allocable to activities described in paragraphs and . But falsely claiming or misstating a deduction can add up to reporting the wrong total tax obligation on your tax return.

This lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation — plus 25% of the next $2,000, for a total of $2,500. This could get you up to $2,000 per child for the 2022 tax year, with $1,500 of the credit being potentially refundable. Our articles and tips are suitable for all those involved in business; including entrepreneurs, business owners, company directors and investors. We will then pass on your CV to our Editor to review. If the Editor would like to take you forward, we will ask you to do a paid trial article. After the trial, if successful we will confirm which publication we’d like you to write for, article fees, timescales, and will send you our Writer Agreement to sign.

Businesses can qualify for a wide range of deductions as well, too many to list here. One of the most common of these is the corporate state and local tax deduction, which allows businesses to deduct the taxes already paid to state governments from their income. There are more deductions available than those listed here, but these are some of the biggest ones. Credit card processing fees, tax preparation fees, and repairs and maintenance for business property and equipment are also deductible. Other business expenses can be depreciated or amortized, meaning you can deduct a small amount of the cost each year over several years. Tax-deductible startup costs include market research and travel-related expenses for starting your business, scoping out potential business locations, advertising, attorney fees, and accountant fees.

If you use the actual expense method, you can also deduct depreciation on the vehicle up to an annual limit. Standard mileage rate method. You deduct a certain amount for each mile driven, plus all business-related tolls and parking fees. The cost of a space in your home you use regularly and exclusively for business. Salary, benefits, and other employee costs.

Independent Contractors. Cost of hiring nonemployees to help in your business. Costs of leaving home overnight for business purposes.