There are very few business owners who find taxes enjoyable. We do them because they need to be done, but that doesn’t mean that we should miss out on tax write offs that could save us money. Here’s a short list of often overlooked tax write offs that business owners should be aware of.
Child Care
There is a tax break available for children who went to school remotely or attended daycare while you and your spouse worked full time or were full-time students. This tax break applies to the cost of daycare, nannies, preschool, before and after school care and even summer camp. To qualify, the child (a claimed dependent) must be under 13 years of age.
Retirement Plans
If you contribute to a 401(k), 403(b), IRA or any o their retirement savings account, whether self-employed or as an employer, you can receive a tax credit on top of any tax deduction given for contributions. This tax credit is ideal and optimal for young adults in their 20s who are not full-time students and are just getting started in their careers.
Freelancers
Freelancers are able to take deductions on many items including computers, printers, furniture, lighting for Zoom meetings, office supplies, advertising, business phones and many other things. Deductions are based on the percentage of which these items are used for their business needs.
Home Office
The home office deduction is not applicable for individuals who are working from home. To receive the deduction for working from home, you must receive some kind of self-employed income.
Continued Education
Many industries require or at least recommend, continued education in order to maintain licensure. Many of these courses are tax-deductible; however, through the Lifetime Learning Credit, you are able to receive up to $2,000 per return on eligible expenses related to undergraduate and graduate classes, certification programs, even if you aren’t working towards a degree.
As an entrepreneur, standard write-offs still apply. It’s a great idea to speak with an accounting professional or CPA for any specific questions you may have pertaining to your personal financial situation. A CPA will also make sure you receive all of the write-offs and credits that your business qualifies for.
For more information on tax write-offs and how to prepare for tax season, contact Porter Capital Group today.