4 lesser-known business tax deductions
They say nothing’s certain but death and taxes. While we might not be able to stave off death, we can show you how to maximize tax deductions. Here are seven lesser-known deductions for the self-employed:
1. Home office: If you have a room or space solely dedicated to your enterprise, you might be able to list it as a deduction. The key word here is solely. A room that doubles as a bedroom doesn’t qualify. Also important is the fact that it should be your principal place of business. For example, if you go into an office and simply use the home location for night or weekend work, you cannot take the deduction.
2. Your vehicle: Most people use their vehicles for business in some respect. The IRS allows you to deduct either the standard mileage rate or your actual expenses. The 2017 mileage rate was .535 cents. If you had considerable maintenance or repairs, you might be better off going with that number. Just make sure you have saved all receipts.
3. Work opportunity tax credits: This one is what you call a win-win. If you hired an employee in a certain target group as defined by the Department of Labor, you may qualify to receive a tax credit. Think veterans, people receiving food stamps, and some ex-offenders among others.
4. Social Security: This is where small business owners get hit hard. Not only do you have to pay your own Social Security premium, businesses are required to pay half of your premium on your behalf, thus doubling the liability. However, you may deduct half of what you paid on your 1040 return.
The tax code can be confusing at best. That’s why hiring a professional is worth every penny. We can help you navigate the waters of deductions — and ensure you are maximizing your deductions and minimizing your liabilities.