With the recent tax reform, small business owners are probably thinking about ways to legally lower their tax liability to further benefit their businesses. There are new credits that small business owners can take advantage of, but there are also several available deductions that might not have been considered in the past. If you want to make the most out of your business expenses by putting a bit of money back in your pockets, here are several tax deductions for 2018 to consider claiming.
Education and Training Tax Deduction
If working in your like of business requires that you continue your education in order to maintain your license, you can deduct the educational expenses that you incur as a need to further your business. Keep a record of your tuition or training costs so that you can apply these tax deductions in 2018.
If you offer periodic discounts to customers for your goods and services, you can deduct your discounts on your taxes. For example, if you usually sell a product for $100 and you offer a 10% off discount, you’d be able to claim the $90 expense so that your discount is recorded on your sales.
Tax Deduction 2018: Freelancers
Many small business owners use the services of non-traditional workers, and the good news is, you can still write off the services completed by freelancers in your tax deductions for 2018. Make sure that you have your freelance workers properly categorized as 1099 workers rather than the W2 of the standard employee.
One of the tax deductions of 2018 you might want to consider is legal fees or other professional service fees that are necessary and directly related to running your business. Personal services, like writing a will, work a little differently. You can take a business deduction on these services but only for parts that are related to your business.
Professional services like bookkeeping, financial planning, or other tax services are also deductible, as they are directly related to the successful running of your business and having organized financial records is absolutely necessary when it comes to small business success.
If your workplace tends to stick with traditional mail and you send out physical newsletters, invoices, or catalogs, you can deduct the cost of your postage for business-related mailings. Keep track of the money that you spend on sending your information through the mail service, as you can claim stamps and postage prices on your taxes.
Having a physical office setting comes with its share of expenses that need to be met in order to keep your business running smoothly. Consider claiming the utilities related to your business—for example, paying for electricity, internet service, or other utilities pertaining to your business. They can each be written off as a tax deduction for 2018 but be sure to keep all of your bills and records proving your payments so that the deduction can be claimed without issues.
Most small business owners have both a personal and business-related bank account to keep their work expenses easily recorded. If you have a bank account related to your work, you can deduct banking fees on your taxes. Whether it’s account maintenance fees, overdrafts, or fees associated with sending or receiving money, if it’s related to your business, you can deduct it.
Office Supplies Tax Deduction 2018
No matter what line of work you’re in, most small businesses have a need for office supplies. Fortunately, if those supplies are used for your work, you can add them to your list of tax deductions for 2018. Keep a list of all of the supplies you’ve had to buy for work and supplement the list with receipts to help organize this deduction.
For small business owners that have a physical office space, you can deduct some of your real estate expenses on your tax return. While you can’t simply deduct the purchase of commercial property, you can deduct for depreciation or improvements made to the area. It’s also a good idea to keep home office deductions in mind if you don’t have a physical office outside the home.
Software and Website Design
Having a business almost requires a dedicated website in this day and age, but many small business owners do not know how to design one. If you’re considering the use of a professional web designer to create a website for your business, you can deduct the cost you paid for the creation of your website, since this service applies directly to your business. Be sure to keep a financial record of the transaction so that you can easily claim the web design service as a tax deduction for 2018.
These are only a few of the deductions for your small business that you may not have considered before. When claiming a deduction, always be sure to provide a paper trail in the case that your claims come into question, and for additional help, ask a tax professional about the most beneficial ways for you to approach your tax deductions for 2018. It’s important to have all of your bases covered so that if the IRS asks questions, you can provide a clear, concise explanation and bring some of your money back to your business for the next tax year.
If you’re in the market for a reputable tax preparer, consider West Austin Tax for your income tax questions and services. You can visit their website for information, video resources, or to schedule an appointment with one of our professionals. You can also call (512) 330-9400 for more support.
*West Austin Tax is not a CPA firm.