7 Tax Deductions for Small Business Owners

business owner looking through receipts

Keeping up with your small business expenses can get stressful, especially when you’re starting out. With tax season upon us, Infinity Insurance is sharing 7 tax deductions for small business owners you may be able to write off this season.

1. Mileage

As an entrepreneur or small business owner, it’s likely you’ll spend much of your time driving to meet with clients and/or vendors. You can probably deduct those miles.

If you’re not familiar with how to deduct your business-related miles, we have two useful articles related to deductions and how to handle mileage reimbursement as well as using apps to track your business-related miles.

2. Home Office

For those of you starting out and working from home, did you know you could deduct the area that you use at home as your office space? Bear in mind, it has to be used exclusively for business-related purposed. Your kitchen table will not cut it.

If you have a designated area though, this could be one of the most important tax deductions for small business owners. There are two ways to deduct your home office space: The easiest way is multiplying the prescribed rate by the square footage designated to serve as office space. The more complicated way includes calculating the actual expenses of your home based on the percentage of the space dedicated to your business.

3. Travel

Whenever you visit your clients and/or vendors for business purposes, there are certain related expenses you may be able to deduct. These include:

  • Transportation: Plane, taxi, train, bus and the commute from and/to your home.
  • Parking and tolls, if you’re driving
  • Car rental fees.
  • Accommodation: Hotels, Apartments, Airbnb…
  • Meals: If you’re going to spend a few days at your client’s site, you could also expense your travel-related meals.

4. Meals & Entertainment

If you’re having lunch with one of your clients/vendors and choose to pay the bill, you could always deduct their part of the meal, or up to 50% of the total cost.

You can only claim this deduction if you substantiate the expense. Always remember to keep the receipts.

5. Education

Have you considered furthering your education while you work? This is one of the tax deductions for small business owners that is most often overlooked.

If you and/or your employees decide to take courses or use resources that are directly related to your business, you can deduct the activities and expenses associated with it. These include, but are not limited to: Workshops, seminars, trade shows, books, DVDs, and any other training materials.

6. Business Expenses

The new computer you’ve just purchased, the pages you’re printing, the supplies you’re buying to run your business... All these business-related expenses can be deducted in your income tax.

You can also add any expenses associated with legal and other professional services. Just as mentioned with meals & entertainment-related expenses, you must keep all your receipts to file your income tax.

7. Advertising

Lastly, another important tax deduction you should take into consideration is any expense associated with advertising. This could range from newspaper ads, to Google AdWords, and even to your company’s website development and maintenance.

These are some of the business expenses you can deduct in your income tax. Always be sure to keep receipts and/or proof of the expenses when filing. At Infinity Insurance, we can help you take care of your business’s needs with a Business Owner’s Policy and Commercial General Liability. Speak to one of our friendly agent by calling 1-800-INFINITY or visit our website to get a free quote in just a few minutes.

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