As a business owner, it is easy to overlook business tax deductions. Many of the things that aren't normally tax deductions for individuals are deductions for businesses. Some examples are as follows:
Your car: If you use your car in your business, you can deduct the business cost of the car, plus operating and maintenance expenses that relate to business activities. You can take the deduction based either on the actual costs or the IRS 'standard mileage rate' whichever gives you the greater deduction. You can use this deduction whether you or your business owns or leases the car.
Personal assets: Some of your personal assets can become business tax deductions. They can become partially or in total depending upon how much you use the asset for your business. For example, if you use your home computer for 60% business purposes, you can deduct 60% of the costs and operating expenses for the computer.
Your home: The home office is the portion of your home that is used for business purposes. In order to qualify for this deduction, your home office must be used exclusively for the business.
Your family: Sometimes you can convert family activities into tax-deductible expenditures for your business. For example, if you don't qualify as an employee of your businss, you might be able to create deductible family medical coverage for your spouse, children and yourself by hiring your spouse in your business. You can allso hire your parents to perfom legitimate work for your business.
Travel: Travel expenses, such as airline tickets, taxi fares, baggage, shipping, your car rental fee, overnight lodging, 50 percent of the cost of meals and other expenses are tax-deductible when you travel on business. Just remember that when you combine personal travel with business, the expenses must be pro-rated between the two. You can also deduct the cost of an employee, partner or customer who travels with you.
Entertainment: You can deduct 50 percent of your business-entertainment expenses. These expenses include business meals, as well as the cost of attending entertainment where you discuss relevant business topics with a customer or client. It can also include tickets to sporting events that your customers attend, concerts, etc.