Business Taxes Always High? These Tax Breaks Could Save You Money!

Published by Kunbi Tinuoye at August 8, 2016

Home office deductions

Are you a sole trader? If so, it’s likely that you work from home – at least, some of the time, anyway. When you do your tax preparation, are you logging your expenses for working from home?

I’m talking about things like lighting, heating, and insurance. In fact, if you read IRS Publication 587, it tells you more about it in detail.

The expenses you incurred before starting your business

It’s commonplace to spend money on your business before you start trading. To be honest, I’ve not met anyone that waited until they formed their business before they spent money on it!

The shocking truth is many new startups aren’t aware they can offset startup expenses. If you’ve just set up your business, tally up those costs. You can use them to lower your first business tax bill!

Source: Pixabay

Small business expenses

You might think that things like bank fees and accounting fees aren’t worth noting. But, when you file your taxes each year, those costs could soon mount up. What’s more, they can significantly reduce your tax bill!

Anything that you spend in your business should get put on your tax bill. Even things like a cup of coffee with a client in a city center cafe. Of course, you should always keep a record of those expenses.

Health insurance premiums

A lot of self-employed people are guilty of not knowing about this fact. Sole traders can use their health insurance premiums to lower their tax bills!

Although they aren’t business expenses, they can lower personal tax bills. So, if you’ve got cover for you and your family, use the premiums to lower your personal taxes.

Carryovers

Sometimes you might not have been able to “carry over” some expenses in previous years. If you’re entitled to do so now, it’s important that you act fast. That way, you won’t forget about your entitlement. But, more importantly, you won’t have to pay so much tax. Examples of carryovers are things like charitable donations and capital losses.

Source: Pixabay

Bad debts

Last, but not least, you should offset any bad debts against your business tax bill. Bad debts are usually things like loans you’ve made to employees. It’s worth talking to an accountant to determine if you’ve got any qualifying bad debts.

Now that you’re armed with the knowledge, it’s time to cut down on your tax bills. Who knows, you might even get a tax refund!

Main Image: #WOCinTechChat

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Kunbi Tinuoye

Kunbi Tinuoye is the founder and CEO of UrbanGeekz. Previously, she worked as a News Correspondent for NBC’s theGrio. Prior, she was a senior broadcast journalist for the BBC in London. Tinuoye currently sits on the SXSW Pitch Advisory Board and CES Conference Advisory Board. She is a key player in the Atlanta tech startup ecosystem and serves as a mentor for Comcast NBCUniversal’s The Farm Accelerator. Tinuoye has received several awards and accolades, including being honored with a Resolution from the Georgia Legislative.