Unlock 6 Hidden Tax Deductions for New Business Owners By Tamecia Shaheed

 

Tamecia Shaheed is a Tax Strategist who helps business owners maximize savings and grow their profits. She affirms that business owners need to proactively plan throughout the year to maximize tax savings. She works with her clients to implement strategies to use the tax code to their benefit legally and ethically.
As a new business owner, one of your primary goals should be to maximize your business deductions to minimize your tax liability. Effective tax planning can significantly impact your bottom line, allowing you to reinvest more into your business. This comprehensive guide will cover various strategies and deductions available to small business owners.

1. Start-up Costs

Starting a new business involves various costs, many of which can be deducted to reduce your overall taxable income even if the company has yet to generate revenue. Normally, the costs of starting a business must be amortized (deducted ratably) over 15 years. However, you can elect to deduct up to $5,000 of start-up expenses and $5,000 of organizational expenses in the first year. Each of the $5,000 amounts is reduced by the amount by which the total start-up expenses or organizational expenses exceed $50,000.


2. Advertising Expenses

Once the business is operating, all forms of advertising are generally currently deductible expenses, including promotional materials such as business cards, digital or print advertisements, and other forms of advertising. However, any advertising expense incurred before a business begins functioning would be treated as a start-up expense.

3. Website Costs

Website development and maintenance costs are deductible as business expenses. Initial development costs can be amortized over three years, while ongoing maintenance and updates can be expensed in the year incurred.

4. Financing

Interest on business loans is deductible, reducing your taxable income. This includes interest on loans for purchasing equipment, real estate, or other business needs. But be careful not to mix personal and business interest expenses. Banks are usually reluctant to lend money to a startup business. However, interest on a personal loan can still be deducted if the interest can be traced to and deductible as a business expense.

5. Vehicle Expenses

If you use your car for business purposes you can deduct its business use by using either the standard mileage method, which allows a per-mile amount, or the actual expense method. However, both methods require that you track your business and total mileage for the year. If using the standard mileage method, you need to know the number of business miles driven. If using the actual method, you will need to prorate the actual operating expenses including fuel, insurance, repairs, and depreciation by the percentage of business miles to total miles. You can also deduct tolls and parking fees with either method.

6. Home Office

Small business owners may qualify for a home-office deduction, which will help them save money on their taxes and benefit their bottom line. Taxpayers can generally take this deduction if they use a portion of their home exclusively for their business and regularly. Plus, this deduction is available to both homeowners and renters.

Contact our office at (678) 288-4811 to consult with a qualified Tax Advisor to ensure compliance with the latest tax laws and tailor these strategies to your business situation.

Learn more about Tamecia at harvesttimetax.com

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