What kind of expenses can I write off?
As a business owner, you are able to write off expenses related to your business. To save the most money on taxes when self-employed, you need to maximize your deductions. I will show you the top 12 ways to keep more money in your pocket.
What expenses are tax deductible for self employed?
Tax deductions for self-employed are business expenses. Here are the top 12 expenses for self-employed
- Mileage or vehicle expenses
This is a real moneymaker if you drive frequently for your business. You can track all miles to meet clients, pick up supplies, and other business related trips. This article covers Mileage expenses more in depth.
- Home office expenses. If you find yourself working from home at some level, you should set up a home office. If you have a designated space and qualify some of your housing costs can be deducted. Read this article for more information.
- Credit card and loan interest. I highly suggest opening up a separate bank account just for your business transactions. If you decide to use a credit card, you need to get a separate card for business purchases. Business interest and fees are tax deductible.
- Phone and internet costs. If your business requires you to make and take calls then a portion of your phone bill may be deductible. Same thing for your internet, when using it partially or fully for business.
- Business travel and meals. This is my favorite category, I love to travel for business. In fact, I rarely take a vacation. I love attending conferences, retreats, and trainings. I pick my travel destinations that way.
- Start-up costs. This one can really add up. The IRS allows you to add up any start up costs or equipment previously purchased for up to three years beore you open your doors and make a profit.
- Education and training This one often coincides with business travel. It is the cost for education, continuing education, trainings, seminars, or courses you take in person or online.
- Advertising. This is one category that most beginning business owners neglect, but can really get your name out there faster and help start the cash flowing. All ads, business cards, banners, or any promotion you participate in, is considered advertising.
- Self-employment taxes. When you are self-employed you are responsible for paying your own social security and medicare taxes, otherwise known as self-employment tax. You get to deduct half of it as a business deduction.
- Retirement savings. Saving for retirement is key when self-employed, since you are responsible for your own plan. The easiest retirement plan is an IR, but often business owners find SEP IRA and KEOGH plans help them save more once This article covers more details about each plan.
- Insurance premiums. I highly recommend Business insurance to protect yourself. Health insurance may also be deductible as a business owner. Health savings accounts are also a good option to look into. More on Health insurance options here.
Business equipment and supplies Equipment used partially or fully for your business is able to be depreciated and the depreciation is deductible. This applies to equipment purchased new or used. You can also convert personal property you already own to business property when used for your business.
These top 12 deductions are the fundamental ways to get you keeping more money in your pocket come tax time.
