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Forbes.com: 3 Crucial Tax Deductions for Small Businesses

Forbes.com: 3 Crucial Tax Deductions for Small Businesses

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By    |   Friday, 17 February 2017 06:39 AM

With the tax deadline slowly inching closer, you may be tempted to just put off the inevitable if you think you are going to owe money to the government.

However, Forbes.com recently offered two fistfuls of tips intended to help small businesses and self-employed Americans save some of their hard-earned money.

Data from the Internal Revenue Service (IRS) supports the notion that small businesses are making a significant economic impact. Of the nearly 148 individual income tax returns filed in 2014 (the last year for which complete data is available, downloads as a pdf), 46 million - or 1/3 - of tax returns reported income from a sole proprietorship, pass-through business entity (like an s corporation, partnership or LLC), rents/royalties, or farms. That's 1 in 3 individual taxpayers who filed an individual tax return reporting business-related income.

Forbes.com's trio of tips:

Legal and professional service fees. "Nobody likes to pay their lawyers, but luckily, business-related legal fees are deductible, as are fees you pay your accountant and/or tax preparer to keep your reporting up to date and accurate," Forbes.com explained. The costs associated with payroll services, insurance brokers, consultants, human relations (HR) personnel and other professionals that you hire to keep your business going also are deductible.

Advertising & promotion costs. "You're allowed a deduction for the costs associated with getting the word out about your business. This can include not only obvious advertising like Yellow Pages or newspaper, magazine, TV or radio advertising but also less in-your-face promotions like the cost of printing business cards and business related swag," Forbes.com explained. "And it's not just the final product that's deductible: you can also deduct reasonable costs of coming up with ad copy or slogans, as well as creating graphics and logos. Think outside of the box, too: the costs of creating and hosting seminars and workshops meant to lure in customers can be deductible as are community sponsorships, like putting your business name on Little League and other team tee-shirts."

Car & truck-related expenses. "You can deduct the cost of expenses related to a car or truck, including lease payments, so long as you use your vehicle exclusively for business," Forbes explained. Limits and other rules may apply so check with your tax professional for details.

And while grappling with their taxes, small-business owners hope President Donald Trump will come through on his promise to slash Washington's red tape in a big way, allowing them to more freely invest in expansion and hiring, CNBC.com explained.

"Weighing on small businesses are complex regulations like the intimidating tax code, franchising liability and health insurance requirements," CNBC reported.

Data show federal regulations are becoming increasingly costly. Research from the conservative nonprofit American Action Forum finds that in 2016, some 401 regulations were finalized, costing more than $164 billion to implement.

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With the tax deadline slowly inching closer, you may be tempted to just put off the inevitable if you think you are going to owe money to the government.
tax, deductions, small business, forbes
Friday, 17 February 2017 06:39 AM
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