5 Tax Savings Tips for Small Business Owners

By: lauras119 Monday February 17, 2014 comments

There was news that the Internal Revenue Service (IRS) sent letters to thousands of small businesses recently asking if they have underpaid taxes the previous year. This is the one rule for small businesses to follow-thou shall not mess with the IRS. Though, this does not mean you should cheat yourself or sacrifice earnings for the sake of tax. There are legal means than can save you dollars and lessen your tax. Here are the 5 saving tips for all small business owners.

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# 1 Savings Tip

Claim home-office space. Having a home-office will allow you a home-office deduction.  This space, in your home, must be solely devoted to your business. This home-office is not limited only to a single room; this could also be part of a whole room. To take office in home deduction, measure your work area divided by the whole floor area of your home in square feet, the resulting percentage will become your home-office deduction.   Also, this year, IRS has created a simplified method to calculate this deduction, by simply taking $5 per square foot of your office space.


# 2 Savings Tip

Take hold of office supply and miscellaneous receipts. Make sure that every time you purchase office supplies these will give you an offset in your taxable income. So the next time you submit your tax make sure you declare your office supply expenses with the receipts as proof.


# 3 Savings Tip

Depreciate office furniture, and other office equipment.  By declaring this you will be able to get deductions from your tax. This includes items transferred from personal use to business use.  Office Furniture, computers, copiers, fax machines, scanners, printers are all tax deductions.  These assets can be depreciated over 5 to 7 years.


# 4 Savings Tip

Keep track of your business mileage.  If drive for your business, or run errands, such as going to the bank, to the post office, to the office supply store in addition to business meetings, you can claim all business miles traveled at 56 cents per mile.  It is amazing how fast this adds up, and how large this deduction can be!


# 5 Savings Tip

Collect travel tickets. The IRS allows deduction on items related business travels.  But documentation is required and details are a must. Be sure you keep all the receipts you get from tolls and parking as well.   The tips that you pay cab drivers, shuttle drivers, hotel assistants, baggage handlers are also a deductible travel expense.  Sometimes you may not receive a receipt for these items, but if you document the expense, you can deduct each occurrence up to to $10 each.

Finally, it is always wise to hire a bookkeeper who knows how to record things properly so you get the tax benefits and savings you need. Call us now so we can get you started in saving taxes this year!


Call me today at 970-215-5901970-215-5901.


About the Author: lauras119


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