Keeping an eye on small business deductions over summer and winter is essential to reducing the amount of taxes you borrowed from come April. But with so many possible write offs, how are you likely to keep everything right? The clearer you are on exactly what does and does not count the number as a write-off for your small business, the bigger your refund by the end of the year. Check out some of the most commonly missed and misunderstood small business deductions, today, and begin tagging your receipts!
Don’t you hate it when you’re stuck in an airport terminal or hotel, and you will need cash, like, now? Even if your only choice is a competitor’s bank, don’t sweat those ATM fees! ATM fees are considered banking fees, as well as for small business owners, banking fees are part of the actual IRS consider regular operating expenses.
Make your life – and the life of your accountant – infinitely easier by having separate bank accounts for business and personal transactions. That way you’ll be able to easily monitor ATM fees for your business accounts every month. Keep in mind that regular people (non-business owners) aren’t permitted to deduct ATM or bank fees, so take the time to only claim those charges associated with your business accounts. So the next time you visit a Wells Fargo machine when you lender with Chase, relax! This category is completely different from the travel deductions you state while away on business.
If you’re keeping somewhere overnight or are out of where you live, be certain to label those receipts in a manner that differentiates them from your regular business mileage. You can find two ways to calculate deductions for the use of your car. First, you can take a standard mileage deduction that’s set by the IRS each year. ‘ll multiply the total number of all by an amount dependent on the IRS. In 2012, for example, the typical mileage rate was 55.5 cents for every business mile powered. You can even claim what’s known as the actual expense of driving your vehicle. This is the total cost of buying and operating your vehicle each yr.
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This amount is calculated with the addition of up all your mileage, the cost of maintenance, vehicle depreciation, etc., and then determining the percentage of your time you used your vehicle for business vs. Ask your taxes professional which option will get you the largest deduction. So what counts as qualified business miles? Believe it or not, driving to and from the office each day does not count as a deduction. Driving to an off-site meeting or temporary workplace does. It’s important to declare a regular place of business therefore the IRS can certainly understand why certain trips away from the office to qualify as business is.
Happily, all cab fares, open public transit costs, tolls and car parking fees that are related to your business are 100% deductible. Again, make sure to separate the price of parking while going to an in-town meeting from the expense of parking for your rental car whilst traveling in another state. Meal deductions are some of the most commonly misunderstood write-offs.