In addition to the basic business tax deductions like office expenses, car or travel, and meals and entertainment (see the budgeting-help.com article, “Tax Savings for Small Business and the Self-Employed”), there are even more tax deductions for small businesses. These may be lesser known, or used by fewer businesses, depending on the business model:

• Depreciation on purchased equipment: Printers, fax machines, office furniture and other objects purchased for the business that will be in operation for over a year can be deducted through depreciation. A portion of the equipment’s value can be deducted over a series of years up to its total value

If you are small business, you also have to option to deduct the equipment costs in a single tax year to obtain a larger deduction.

• Rental/Leased Equipment: If your business requires a fleet of delivery trucks or vans, or even computer or cubicle arrangements for a group of employees, you may do what some businesses do and lease or rent all of the equipment instead of purchasing. By doing so, you don’t lose any tax savings because rented or leased equipment costs are tax deductible.

• Insurance: Any form of insurance related to your business (e.g.: business insurance, car insurance for a business vehicle, etc.) is tax deductible. Additionally, if you provide insurance for your employees as part of a health insurance group package, their insurance is deductible from business taxes.

Keep in mind that as the business owner, your health insurance costs would be deducted from personal income taxes. If you are self-employed, all of your health insurance costs are fully deductible.

• Professional Fees: If you consult with a lawyer to draft contracts and agreements on your behalf, a CPA to do your taxes (and help you maximize deductions), or a finishing carpenter to do remodeling on your office space, the fees paid to these professionals are tax deductible.

• Startup Expenses: Once you start your business, the fees and costs associated with startup (advertising materials, market research, etc.) can be tax deductible, but only after you officially begin operation. All startup expenses are deductible during the initial 60 months of your business.

Always consult with a tax professional when seeking tax savings strategies or devising a tax plan (after all, it is deductible). For even lesser-known tax deductions for you business, see “Other Tax Savings for Small Business”.

References

E. Ralph Stewart. Top 25 Deductions for Businesses

Stephen fishman. Top Ten Deductons for Your Business

www.nfib.com. Tax-Saving Moves That Will Pay Off Next filling Season