Tax Advantages Every Small Business Owner Needs To Know

In the wise words of Benjamin Franklin, “Nothing is certain but death and taxes.”

Preparing taxes may seem like just another burden thrown upon you as a small business owner. And while taxes are inevitable, there are some small business tax advantages you should prepare for throughout the year and leading up to tax season.

Office Expenses

This is an obvious one. Any expenses that go into creating the optimal office space can be tax deductions for small business owners. Whether you like to go old-school with wooden desks and swivel chairs or prefer the more modern office with beanbags and foosball tables, it’s all deductible! Even smaller supplies such as pens, highlighters and ink cartridges can help to provide your small business tax relief at the end of the year.

If you have a home office, just make sure that it has definable boundaries. If you find a new kitchen island you just can’t live without, throwing your laptop on top of it does not make it a work desk. Your workspace must only be your workspace to receive the tax deductions.

Education

Markets are always changing, and it’s important for business owners and their teams to stay informed of the latest advances in their field. While educational classes can be expensive, you can easily decrease your small business tax rates by deducting the cost of classes taken throughout the year. These can be in-person or online classes for any member of your team. Books, magazine subscriptions, and software also count as educational if they pertain to your business.

Travel

Getting from point A to point B, as long as it is work-related, can be deducted to boost your small business tax savings! If you use a company car, the cost of the car, gas, and maintenance are all deductible.

Any business travel outside of your city for longer than one day also counts as a tax write-off. Eligible costs can include hotel stays, airfare, parking, tolls, meals, and even dry cleaning while you’re away on business. So go to that conference! Some of those costs will be offset with your small business tax savings at the end of the year.

Entertaining Clients

Taking a client out for dinner? That can help get you a better small business tax refund when tax time rolls around! Up to 50% of meal cost can be deducted as long as the expenses are reasonable, and business is discussed. That includes your weekly office pizza lunch for your employees. If business is conducted, it can be written off.

Keep the Receipts

The only way that you can claim any of these small business tax reductions without the IRS knocking down your door is if you save the receipts; all of them! Back in ancient times before computers, this meant stuffy filing cabinets filled to the brim with a mess of papers. Now, most companies use some sort of online bookkeeping platform to stay organized, provide assistance, and get better small business tax rates.

Even if you use online software, it is always a good idea to work with an online tax advisor or even outsource the entire process to make sure that you are getting the best return possible. Small businesses need all the help they can get when it comes to saving money.

See how SmartBooks helped one marketing agency save $280K through proactive tax planning in our case study below.