8 Little-Known Tax Deductions You Should Prep!

Start preparing now to save money next tax season by accounting for these tax-deductible business expenses.

8 Little-Known Tax Deductions You Should Prep!

Many small business owners aren’t aware, but they’re often eligible for lots of different tax deductions from the government.

Sure, most entrepreneurs know to deduct expenses like employee salaries and benefits, the cost of goods sold, and rent. But there are some more unusual opportunities for small business owners, too.

It can be difficult to figure out exactly which deductions you qualify for—especially if you don’t keep meticulous records or set aside time to pore over your expenses—but any tax deduction you don’t take advantage of is just money left on the table.

So, when tax season comes knocking, refer to this list of eight little-known tax deductions you should be aware of—and save money for your small business.

1. Utilities

You might already be well aware that you can deduct your business’ rent payments from your taxes—and even if you work from home, you can calculate a percentage of your rent to deduct based off of how much space you use for your business.

But did you know you should be deducting your

From telephone calls to electricity and water bills, your small business is eligible to save money here. However, you do need to make sure that you’re only deducting business expenses and not personal ones. Keep records of business versus personal phone calls when deducting from your telephone bill, and save your

2. Insurance

Business insurance is generally not a bad idea: Nine times out of 10, you’ll be extremely glad you made those small monthly payments if something unexpected occurs.

And as an added bonus, many types of business insurance are actually tax deductible. From health insurance to workers’ compensation, make sure you put these premium payments on your tax forms next year.

3. Equipment & Machinery Payments

There are plenty of good reasons to rent your equipment and machinery instead of buying them. From financing, it can be a compelling option.

One more advantage: You can deduct your rental payments from your taxes. (Plus, you can also deduct any repairs you need to make as well.)

4. Car Expenses

When it comes to your vehicle, there are few different tax deductions that many small business owners forget about.

You can use the standard mileage rate—53.5 cents per mile as of 2017—to deduct the amount you drive for business purposes. Or, if you don’t take the mileage deduction, you can deduct the actual expenses related to a business use of your car, van, truck, or any sort of motor vehicle:

  • Parking fees
  • Advertising
  • Union member trips
  • Gas and oil
  • Tire maintenance
  • General auto repair
  • Registration

If you’re not the type of person who decides to calculate your business auto expenses for the tax deduction you deserve.

5. Office Supplies & Furniture

That’s right: You can deduct both office supplies and office furniture.

As a small business owner, you know all too well how small expenses stack up. Paperclips, thumb tacks, staples, pens and pencils, paper, notebooks, post-its, printer cartridges—all these supplies and more are tax deductible for small business owners.

And save your receipts for the slightly bigger purchases, too. Got a nice chair or couch for your home office so clients can wait in comfort? Dished out cash for additional chairs,

6. “Entertainment”

Depending on the type of small business you run, this might sound like a joke—or a blessing.

If part of running your business involves taking clients out to meals, theater events, concerts or clubs, baseball games, or anything like that, then don’t simply consider that money to be an acquisition cost. It’s possible to deduct up to half of those expenses for your business.

The IRS will want to see that these expenses are clearly for business purposes that are necessary, appropriate and helpful. But if that sounds like you, then make sure to mark these outings for future savings.

7. Interest Payments

Got a mortgage, small business loan or business credit card?

That’s right—those daily, weekly or monthly interest payments are also tax deductible for small businesses. These savings can be a huge boon to entrepreneurs who are growing their businesses with debt.

And what’s better than an already-itemized list of tax deductions for you to simply add onto your tax forms or send over to your accountant?

8. Business Taxes

Surprised?

Many small business owners aren’t aware of this, but your business taxes are actually tax deductible on their own. From federal, state and local taxes to income, real estate (including purchases and sales), employment (including social security and Medicaid payments), self-employment and sales taxes (including resale merchandise and depreciation costs), these expenses are well worth recording for those future savings.

The Bottom Line

The more you save on taxes, the more money you get to put right back into your small business. Use these tax deductions to take advantage of the ability the government gives you to manage a growing, thriving business.

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