Businesses Expenses and Assets that Can Be Deduced from Taxation—Part 2
Last Updated April 14, 2023
We will continue the discussion from the last blog article part 1 (Businesses Expenses and Assets that Can Be Deduced from Taxation —Part 1)and discuss some further avenues where you can keep your taxable amounts low.
Table of Contents
Employee Health Coverage
If your business is providing collective health coverage to the employees, then you might be able to take that monetary contribution out of the tax net. Work with any bookkeeping expert of tax preparation firm to ascertain how much amount you can deduce from the taxation in this regard. As per some tax preparation experts, small businesses with 25 employees or less are eligible for this deduction.
Full-time Employee Salaries
Small businesses can also file taxes while deducing the salaries they are paying to full-time employees. Nevertheless, not all doled out wages are tax-deductible. For instance, the payments made out to freelancers and contractors can’t be deduced from the taxes ( taxation ). To get more clarity on this, get a tax preparation firm on board.
If you are operating out of rented space then its cost can be deduced from the taxes. However, make sure that you are categorically mentioning it at the time of filing taxes. The IRS classifies rents as a cost of doing business and thus it can also be deducted from the taxable income. Similarly, other utility expenses can also be waived off from the taxes.
Overhead Cost of Home Office
Many small businesses are operating out of the house of the owner. However, many people don’t know to use this feature to their benefit in terms of tax deduction. You have the room to deduce some of your overhead home expenses from taxation by declaring it in a home office.
For instance, you can deduce mortgage payments from your taxable income if you are declaring your abode in a home office. To avail of this tax deduction, it is better to hire the expertise of some seasoned tax preparation firm.
All things considered, there are plenty of avenues particularly for a small business to keep its taxable income minimum. The discussion in these two blogs also suggests that availing maximum tax deductions is only possible when you are working with professional bookkeeping experts or a tax preparation firm.
My Count Solutions provide bookkeeping and accounting services to small businesses. Get in touch with them if you are not working with in-house bookkeeping experts. Their experts can help you in keeping the value of taxable income as low as possible.
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