5 Key Tax Deductions to Keep in Mind This Tax Season

5 Key Tax Deductions to Keep in Mind This Tax SeasonCredit lOvE LovE/Shutterstock Staying up-to-date on tax developments and changing laws is an important parte of being a small geschftliches miteinander owner. While it may be tempting to avoid the headaches of tax season, youre better off staying focused and informed throughout the year so come tax time you can work more productively with your CPA or tax professional. By being aware of deductions, especially those that are often overlooked, you can enaya that youre saving the most money on your taxes each year. It can also lead to more informed discussions with your tax professional.Typically, I see geschftlicher umganges and their owners focused on what their geschftslebenes do providing a service, creating a product, or selling a product, said Sam Hicks, a CPA with the California-based accounting firm Stern, Kory, Sreden and Morgan. When theyre tasked with focusing on something that can be very compli cated for a week or two out of their year, it can be seen as a chore with the best method to completion being getting it done as quickly as possible. The rush this creates doesnt lead to a full understanding of potential tax breaks and strategies.If youre working on your taxes and think you qualify for one or more of ansicht deductions, make koranvers you discuss with your CPA the deductions your business can take advantage of.Related Interested in tax software for your business? Check out our best picks for tax software for businessHome-based businessesOne standard deduction that many business owners overlook particularly freelancers or very small business owners is deducting home-based expenses. This can apply to a range of expenses, like housing payments, Wi-Fi plans and even utilities. The amount of savings varies based on your situation but is usually paid on a percentage basis.Nothing in the internal revenue code prevents businesses from using a reasonable usage allocation m ethod meaning if a small business owner uses their internet 75 percent of the time for the business, 75 percent of the bill would be a reasonable deduction for the business same with utilities, security systems and home upkeep, Hicks said.According to Tom Wheelwright, CPA and author of Tax-Free Wealth, having a home office can extend your deductions to other areas as well. You may qualify for a higher deduction on your vehicle.While most business owners take some deductions for their car, they miss a lot, because they dont take a home office deduction. Since having a home office can eliminate the nondeductible commute. With your home office commute being 30 feet from the kitchen to work, many business owners find their automobile deduction increases by as much as double what it was previously, he said.Planning for retirementIf youre a small business owner, dont overlook setting up a retirement plan for you and your employees because of your businesss size. Setting it up right, whil e it will vary based on your businesss needs, can be a viable financial option if you qualify for certain deductions.The deduction would come out based on the amount thats funded at the corporate level, said Scott Berger, a CPA with Florida-based accounting firm Kaufman Rossin. Many small business owners just completely forget about it or theyre afraid that theyre going to have to fund too much for their employees and totally disregard it without actually investigating and seeing what the benefits are.Do you employ your children?geschftsleben owners who employ their children can save money by structuring their taxes to get a deduction. Small businesses can hire children as young as 12 to work for the business. As long as theyre paid a proper wage, these kids can contribute to the family business. If you are employing some of your children, you can get a tax deduction on their earnings.In 2017, the standard deduction allowed for all single people, including children, is $6,350 this means if a parent business owner is taxed at a 35 percent marginal tax rate and pays their child $6,300 for their work work the parent may have had to do themselves the tax burden of that $6,300 (35 percent time $6,300) shifts away from the parent to the child and with the wage amount being less than the annual standard deduction, the child wouldnt have taxable income, Hicks said.Mileage reimbursementMuch like home-based businesses, some small business owners qualify for a tax benefit based on where they travel for their jobs. Going to a clients location or traveling other places for business are obvious miles, but Jeffrey Schneider, founder of SFS Tax Problem Solutions, said that business owners should try and log every work-related mile for the tax benefit.Many people remember to include miles to their clients or vendors. However, what about those trips to the office supply store, bank, post office? These miles add up, he said.Legal feesOne area businesses can get a deduction on is legal fees and tax preparation software. If youre using software or working with a CPA on hiring your taxes, or have various other outstanding legal fees, you could qualify for a deduction. Michel Valbrun, CPA and founder of Wealth Warriors, said that some businesses qualify for legal-related deductions. In general, it could be possible to deduct fees you pay attorneys for tax-related work. This can also apply to tax prep software. This deduction, like many featured in this article, varies on a case-by-case basis. If you think you qualify for a deduction on legal or tax-related fees, its definitely worth exploring this option with a tax professional.Bottom lineIts important to stay on top of your taxes throughout the year. If you work with a tax professional, ask informed questions to ensure youre getting the most out of your filing each year. Its also important to consider accounting or tax software that can help you file, but if your business is large and complex, its crucial to work with a CPA or tax professional.Regardless of how you complete your taxes, make sure youre staying informed and on top of law changes. In the end, working with an accountant is the most beneficial to your business if you have good communication and can plan for a healthy financial future.We want to be their partners, and we want to communicate with small businesses on a regular basis, Berger said. You go to the doctor for preventative maintenance, you should go to your accountant for preventative maintenance as well. Matt DAngelo Matt DAngelo is a Tech Staff Writer based in New York City. After graduating from James Madison University with a degree in Journalism, Matt gained experience as a copy editor and writer for newspapers and various zugnglich publications. Matt joined the staff in 2017 and covers technology for Business.com and Business News Daily. 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