5 Small Business Tax Tips for Business Owners
Share this article:
What Are Some Business Tax Saving Tips?
1. Properly Classifying Your Business
2. Researching Tax Credits
Disabled Access Credit Companies that make their business more accessible to customers with disabilities may receive a tax credit for any year they have any expenditures related to providing disabled access points. Increasing Research Activities Credit If your company is engaged in any research and development (R&D) for a new product or manufacturing process, or for improving a product’s quality, then you may qualify for this tax credit. Work Opportunity Tax Credit (WOTC) This is a Federal tax credit available to employers for hiring people who have consistently faced barriers to employment. If you employ veterans, ex-felons, or anyone that is on the IRS's list of targeted groups, you may be able to receive a tax credit for that employee’s qualified wages.
3. Knowing Which Expenses are Deductible
Home office deduction If you run a small business from home, and it’s your principal place of business, you may be able to deduct a portion of your home ownership or rental expenses. For this deduction to work, the home office needs to be used regularly and exclusively for the business. Business vehicle deduction If your car is 100% used for business, you may be able to deduct all of the costs of ownership and operation (within limits). If it’s used for both personal and business, you may be able to deduct a portion of its costs. Business Meals As a small business, you can deduct 50% of food and drink purchases that are related to your business for 2023. Most entertainment expenses are not deductible. However, food you supply for employee events, such as holiday parties and team-building events are generally 100% deductible. Work-Related Travel Expenses You may be able to deduct all expenses related to business travel if the trip took you away from home and was necessary for your business. This can include airfare, hotels, rental car expenses, tips, dry cleaning, meals, and more. The Qualified Business Income (QBI) Deduction The qualified business income (QBI) deduction enables small business owners and people who are self-employed to deduct up to 20% of their qualified business income on their taxes. For 2023, total taxable income must be under $182,100 for single filers and $364,200 for joint filers to qualify.
4. Understanding How Your Loans Are Taxed
5. Setting Up — or Adding to — a Retirement Account
Loans For Starting a Small Business
SBA Community Advantage Loan
SBA 7(a) Loan
Personal Business Loans
About the Author
Share this article: