Are you a new small business owner in Rapid City, South Dakota? When the time comes to file for taxes, it can be a daunting task. One tip that can help you this tax season is to remember all of the tax deductibles you can claim. Doing so allows you to deduct your taxable income when computing your taxes; thus, reducing the amount owed.
With years of traditional accounting experience, I am confident that we can take advantage of these 10 small business tax deductions. At first, it might seem like it’s not worth it as a busy small business owner. However, as you start to grow, these tips can come in handy. You can instead use this info to help you save money that can be reinvested back into your business. These top 10 small business tax deductions will help you start on the right path.
Keep reading to see how your Rapid City small businesses can save money this upcoming tax season.
1. Business Meals
Client meals are a big part of operating a business. As long as the meal is a necessary part of business and the owner or employee is present at the meal, you can claim a portion of this on your taxes. If those requirements are met, then you can write off 50% of the meal.
Just make sure to keep documentation, a receipt with the place, date, and the business relationship of the person you were with. However, if you supply meals for employees, you can write off 100% of the cost. A team office party or picnic will do the trick and put that bad boy on the company card.
2. Auto Expenses
A vehicle can be an integral part of any small business. Whether you’re driving to meetings or hauling inventory, they are handy tools. Plus, the expenses that come with operating a vehicle can be written off. If you can prove that the vehicle is used for business operations, then you can deduct gas, insurance, repairs, registration, and depreciation.
3. Home Office Supplies and Furniture
Every type of business needs office supplies. Paper, pens, printers, and computers can be written off. It may be a small expense, but they add up over time. Other office supplies that can be deducted from your taxes include:
- Office chairs
- Work phones
- Office supplies
- Conference tables
4. Telephone and Internet Expenses
As long as the telephone and internet expenses are directly business-related, they can be written off regardless of a home office claim. With multiple lines, this will come in handy as you grow. Just make sure you add a Schedule C to your tax return.
5. Travel Expenses
Traveling for business can get expensive, whether it is planes, trains, or automobiles. If you travel away from your tax home for longer than a normal workday, it can be written off.
You can also deduct parking, meals, lodging, tips, laundry, and the cost of shipping samples or display materials. Make sure to keep a record of all expenses.
Any utilities used at a business location can be deducted. Keeping the lights on and the water running in your business location is vital for operations. This also includes phones, water, heat, and trash.
7. Employee Gifts
Do you appreciate your employees? You can show that appreciation with a gift that can be deducted 100% up to $25 per year per employee. Some great examples include:
- Gift Cards
- Snack Box
We are no experts, but learning a new skill that adds value to your business can be deducted. Classes, books, workshops, subscriptions, or seminars all count; they just have to help improve your business or operations.
9. Business Entertainment
Entertaining clients with an event or meal? This can be written off. Just make sure that you keep records or receipts from the event.
10. Software Subscriptions
Does your business use Microsoft Suite, Shopify, or any other software? These can be claimed to keep your business running.
Get Bookkeeping for Small Businesses With Jessi’s Bookkeeping & Financial Services
As a Rapid City small business owner, saving money is very important. Finding ways that allow you to optimize your cash and make your budget work for you will help in the long run. These 10 top small business tax deductions are a great way to start saving for your South Dakota business.
At Jessi’s Bookkeeping & Financial Services, I am a remote small business bookkeeper based in Rapid City, South Dakota. I know how strictly small businesses have to manage their books. With my tax and accounting experience, I can help future-proof your small business by finding ways to save you money. If you need small business finance support, fill out my contact form here to set up a meeting to talk to me in person. I look forward to learning more about your business!