Making a Profit: What to Know Before Tax Season

Written by  //  2017/02/23  //  Student Living  //  Comments Off on Making a Profit: What to Know Before Tax Season

Although plenty of business owners lose a lot of their hard-earned money every year to taxes, you do not need to be a member of this category. There are many ways you can make a profit on this yearly hassle. Consider the following tips when doing your taxes this year.

Home Base Deductions

If you manage your business from a home office, you can deduct part or all the related expenses. For example, the Internal Revenue Service permits deductions for business expenses related to electricity, telephone, internet, insurance, repairs, and depreciation. Also, you can deduct expenses related to traveling to and from your home to meetings and secondary business sites, including the costs for gasoline, parking, tolls, and vehicle upkeep and repair. If you are self-employed, you can even deduct health insurance premiums.

General Business Deductions

Whether you run your business out of a home office or commercial building site, you can deduct many general expenses as long as those expenses are considered "ordinary" and "necessary" to the running of the business, including costs related to new and used office furniture, supplies, employee pay, retirement plans, and business improvements. You can deduct money that you borrowed for the business and any interest that you had to pay. You can even deduct any type of reimbursements or per diem that you gave employees when they traveled in addition to the previously-mentioned costs associated with the use of vehicles for business purposes.

Gift Deductions

Lastly, you can deduct the costs associated with giving gifts throughout a tax year as long as you have receipts and other financial records to support your claims. Beyond deductions for charitable donations to individuals and organizations, you can also deduct bonuses and physical gifts that you bought and gave to employees and business partners like branded merchandise and vacation packages. 

It is important to remember that deductions are not the only way to make a profit at tax time. You might be able to profit from unclaimed money the IRS has held for you from previous tax years because of filing errors or one or more returned tax refund checks. One of the easiest ways to find out how to find unclaimed money is through an unclaimed money service like missingmoney.

Keep in mind that you can find many other deductions and tax savings ideas on the IRS website. You only need to perform a simple keyword search with words describing your business type plus the word "deduction" to find the details that can help you make a profit.

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