Tax deductions help small business owners reduce the cost of running their enterprise. While most business owners are familiar with some tax write-offs, they aren’t taking advantage of all the business deductions.
It’s essential to work with your accountant or bookkeeper to track your small business tax expenditures and maximize your tax deductions. Still, it’s helpful to know which write-offs to track.
The following are 21 small business tax deductions that are very commonly used. This is not an exhaustive list, but it’s a pretty solid place to start.
Cost of goods sold are all the expenses that go into making the product you sell. So if you sell t-shirts, for instance, the COGS would be all the expenses that make that t-shirt ready for sale. Cost of the shirt, the printing, the packaging, etc.
If you use a car, van or light truck for your company, you can deduct the cost of using it for your business.You can do this by keeping records of when you use it for business. When you write it off, you can use the standard mileage rate set by the IRS of $0.58 a mile.
You can write off taxes on labor, bonuses, commissions, and wages that you pay staff members. Additionally, you can write off certain benefits, such as retirement plan contributions.