Have you finished your taxes yet for 2017? Are you going to have to pay taxes on your business? I hope you are paying a lot! That means that you made money, well, enough for the IRS to notice.
But, I bet that you moaned and groaned and wish the tax bill was not so high. We all want to make lots of money, but when it comes to tax time, the lower your income is, the better. At least your Net Income, your income after you minus all your expenses. Well, let’s make sure you are taking every deduction that you can.
It’s vital to be sure you are taking as many expenses as deductions as possible in your business. These lower the income that you are taxed on and will save you money on your taxes.
Here is a list of often overlooked deductions that you can take to lower your bottom line.
Cost to run your business - anything that you are spending money on to run your business is a deduction. This included any apps or software programs you are using, anything you are buying for your computer or your website, anything you buy for your office, supplies, and postage to mail items to your clients. If you have hired anyone to help you in your business such as a VA, web designer or copywriter. Are you spending money on something to run your business or your office and that helps you make money, then write it off.
Financial Fees - any bank fees on your business accounts, interest on your business credit cards, Paypal and any other merchant fees.
Telephone - if you are using your telephone for your business, you can write off the portion that is used for business. If you use it 50% for business, then you can deduct 50% of the cost of your cell phone bill.
Cost of Goods - are you selling items in your business? Be sure you are deducting the cost of the items when they are sold. When you purchase items, they are in inventory, which is an asset. Then move the expense for that item when it is sold to your expenses. Anything that goes into making an item also is inventory.
Marketing and Listing Fees - are you buying Facebook ads? Listing items on websites to sell? Paying any commissions? All these fees can add up. What other marketing are you doing for your business? Be sure to expense it!
Networking - do you go to any local networking events? How about meeting potential clients in a coffee shop? Yep, you can write off meals if they are business related.
Education - do you have a coach? How about books or magazines to help you in your business? Anything that helps you do better in your business you can deduct. This also includes seminars, programs or courses you may travel to or pay for to do online.
Travel - be sure you are writing down every mile you drive for your business, including going shopping for supplies, to the bank or post office, or to meet with clients. You get a certain credit for every mile driven and this can really add up. In 2017 the deduction was .535 for each mile. Parking fees are another expenses that is often overlooked. Also be sure to track any traveling expenses you have to go to seminars or other educational events.
Taxes and Tax Filing Fees - you can deduct what you paid your tax preparer last year to do your business taxes. If you did them yourself you can deduct the cost of any software you purchased or fees to file. If you paid any taxes, licenses or permit fees to your city or state, you can also write those off.
Anything unique to your industry - there may be other things that are a bit out of the norm, but that apply to your business. As I've said, if you spend money on something for you to make money, deduct it!
The key to getting the maximum amount of deductions is good record keeping. If you are keeping track of your money during the year with a bookkeeping system that is easy for you to use, you will not have to scramble at the end of the year to find all your deductions. Be sure you are keeping receipts in an easy to use filing system. Make all your systems super easy so you don’t get frustrated and put it off. And plan a time in your schedule for regular business money maintenance.
I bet next year your taxes will be easier to do and you’ll be happy that you knew how to make them lower!
Need help with any of this? Schedule a Money Maven Strategy Call HERE and we can work together to get you ready for tax time.
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