Smart Moves for Business Owners | Maximizing Write-offs to Lower Tax Liability

Hey there, Keepbooking community! It’s Nicole, and today I’m here to share some savvy tips for business owners looking to maximize their tax write-offs and minimize their tax liability. As we approach tax season, it’s crucial to be proactive and strategic about your expenses.

1. Review Personal Statements for Business Expenses

Sometimes business expenses end up on personal accounts. Scour your personal bank and credit card statements for any business-related purchases you might have missed. This could include software subscriptions, business meals, or travel expenses.

2. Track Vehicle Mileage

If you use your personal vehicle for business, don’t forget to track and report the mileage used for business purposes. The IRS allows a deduction for business mileage, which can add up significantly over the year.

3. Deduct Auto Expenses for Business Vehicles

For vehicles used exclusively for business, keep tabs on all expenses - gas, maintenance, registration, and repairs. These costs can be deductible, reducing your overall tax burden.

4. Report New Vehicle Purchases and Business Assets

Bought a vehicle or new equipment for your business this year? Let your bookkeeper or CPA know. These assets can often be depreciated, offering valuable deductions. Remember, the rules can be complex, so accurate reporting is key.

5. Claim Home Office Expenses

For those of you working from a home office, a portion of your home expenses could be deductible. This includes rent, utilities, and even repairs. However, the space must be used regularly and exclusively for business.

6. Consider Retirement Contributions

Contributions to a retirement plan can be a win-win: securing your future while reducing your current taxable income. Explore options like a SEP IRA or Solo 401(k) if you’re self-employed.

7. Donate to Charity

Year-end charitable donations can also provide deductions. If your business has had a profitable year, consider giving back to the community while also gaining some tax benefits. One of my favorite charities is Zephyr Mountain Farm Sanctuary.

Conclusion:

Remember, the key to maximizing deductions is keeping meticulous records and understanding what qualifies as a deductible business expense. Collaborate with your bookkeeper or CPA to ensure you’re not missing out on any opportunities. By being strategic now, you can position your business for a more favorable tax outcome.

Looking for more personalized advice? Get in touch with us at Keepbooking. Let’s make sure you’re set up for success this tax season!

Happy Saving,

Nicole at Keepbooking