Starting Your First Business? Here's What You Can Write Off
Tax time has accountants and bookkeepers all across the country racing to meet the filing deadline, which brings up many pertinent questions: Where did I leave those receipts? We spent how much on that? What exactly can we write off this year?
If you're just getting started on your first business or plan to create one this year, it can help to understand just exactly what is and isn't considered a business expense by the Internal Revenue Service. Here are some commonly overlooked expenses you should keep tabs on throughout the year so you can reduce your debt to Uncle Sam:
Under current tax laws, business travel for work is largely tax deductible, with every night spent in a hotel qualifying for tax benefits upon filing. However, whether you're eating alone or with a client, you'll only be able to deduct 50% of your meals and if you decide to extend your stay for personal reasons, your vacation time won't be applicable to your tax filing.
Business and Professional Fees
If you paid for books, access to research, sought legal assistance, or had to pay for licensing in preparation for starting your business, you'll be able to deduct those fees once tax time rolls around.
Software Licenses and Subscriptions
Section 179 has recently been increased to allow for software-as-a-service (SaaS) and other software-related purchases you make in a tax year. Previously, businesses had to depreciate the cost of software over three years, but now these deductions can be fully completed within the year of purchase.
Phone Calls and Communication Fees
If you make expensive phone calls in order to conduct your business, you can itemize them in your bill and deduct them as business expenses. While the age of the Internet has allowed for a multitude of methods for low-cost communication, you can still deduct things like Skype credit and email hosting fees as business expenses if they're being used on a professional basis.
Remember, just because this year's tax deadline is fast approaching doesn't mean it's too early to start thinking about next year's headaches. Get a jump on your company's accounting and bookkeeping strategy by giving Honest Buck Accounting a call. We can advise you as your business grows and keep you on the right path throughout the tax year. Use the contact form to get in touch or call our offices at 206.533.7097 today!