Small Business Tax Deductions - Top 5

With tax season just around the corner it is never too early to start thinking about available tax deductions. Small business tax deductions are important to ensuring that you are getting all the return that is possible. Some tax deductions for small businesses are: * Office furniture * Office equipment and supplies * Software and other subscriptions * Insurance premiums * Retirement contributions In addition to these deductions there are a few other deductions that should be kept in mind while filing. Simply keeping good records throughout the year will help with these items and will make calculations at tax time less stressful. Social Security If you are self-employed or a small business you have to pay double the social security as you pay as both the employer and the employee. The good news is that you can claim back half on your 1040. Home Office If you have a room in your house that is used exclusively for your small business it may be used as a deduction. The room cannot be used for any other purposes to qualify. You can claim a percentage of rent or mortgage and utility bills based on the square footage of your office area in relationship to the square footage of the house. Mileage Keep a journal in your vehicle of all small business related travel and expenses. At the end of the year this can be claimed one of two ways. It can either be deducted as a straight calculation of mileage times the allocated rate plus other expenses or it can be completed as a percentage of the total mileage on the vehicle plus expenses. Travel and Gifts Hotel stays, travel on airlines or other forms of transportation and gifts are all deductible. Saving receipts is critical to be able to calculate this at tax time. Children working for you If you are the sole proprietor of your small business and you employ your own child under 17 that child can make up to $4,850 and avoid paying any taxes. You will not have to pay Social Security tax and you can write the salary off as a business expense. This same policy applies if you and your spouse are in partnership together and there are no other partners. It does not apply if you are a corporation.

Article by: sayush | Total views: 35 | Word Count: 401

About the Author

On http://www.easy-tax-deductions.com/ you will find articles on tax deduction software and small business tax deductions.