Running a Business is a multitasking work, which makes the business owner well trained in managing the business to derive out profits. The entrepreneurs have to be pro-active to manage the workflow for continuous growth efficiently.

The Deductible business expenditures assist the entrepreneurs in many costs occurring in for the company. The business owner is aware that most of these expenditures can be written off.

Let’s look at the most common tax deductions for small businesses.

Car &truck expenses– Use the IRS standard mileage rate instead of doing it by actual outlays. You can use the IRS standard mileage whether you own the vehicle or have it on the lease. Using IRS Standard will wipe away the need to keep records.

Salaries &wages– This includes payments to employees such as salaries, wages, bonuses, commissions, etc. which are deductible Expenses of a business.
Contract labor– The small businesses might use freelancers or independent contractors to fulfill the labor needs at. The expenses incurred from these are deductible.

Supplies– The price or cost of items utilized in the business are fully deductible expenses (this includes the postage expenses). If you choose to use a “ de minimis safe harbor” which enables the cost of tangible property, then the items will be treated as non-incidental material & supplies.

Depreciation-It is an allowance for the price of buying business property. There also exists “bonus depreciation allowance” which is also another type of write-off. Business Property rent-In this category comes to the cost of renting space such as an office, boutique, factory, etc. and the cost is fully deductible.
Utilities-The expenses incurred in your business facility for electricity come under this category. The other utility costs have mobile phone expenses. In case you claim a home-office deduction and have two landline connections then you claim the expenses of the second landline.

Also Read: An overview of Tax Forms 940, 941, and 944

Taxes– You can utilize the license fees, regulatory fees, and taxes on real estate & personal property as deductible expenses. Though for the self-employed business owners, half of the self-employment tax is not a business deduction and it comes in the personal income tax category.

Insurance– Costs for the Owner’s policy, flood insurance, business continuation allowance, etc. are fully deductible expenses. The cost of

Repairs– You can fully deduct the expenses for ordinary repairs & maintenance.
Commissions & fees– Commission and fees expenses are fully deductible, except commissions paid about ‘realty’.

Travel– This includes the cost of transportation and lodging done for business purposes by you or the staff members.

Advertising– You can fully claim advertising costs under deductible expenses.

Home-office expense-You can claim a portion of the personal costs of a home under the deductible expenses if you are using your home as the principal place for carrying out your business.
Legal and professional fees– The legal & accounting fees can also be claimed fully.

Meals and entertainment-Meals and entertainment costs are deductible up to 50% however, some these are fully deductible as well.

Rent on machinery &equipment-This are fees paid for lease or rent items in your business.
Business indebtedness interest– Usually the interest on loans that businesses take are fully deductible as a business expense.

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Thank you for reading this article. Hopefully, it provided you with useful insight on various types of deductions that can be used in the business.

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