Tax Deductions

As a small business owner, you want to keep more of your hard-earned money. Fortunately, there are plenty of small business tax deductions that could help you save more of your profits and grow your business. While business taxes can be complicated, we’ve compiled the best ways to make paying your federal, state, and local taxes less painful. 

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Though not a comprehensive list, each of these business expenses are tax deductible:

  • Advertising and promotion
  • Business-related meals
  • Business insurance
  • Interest and fees on your business bank account
  • Mileage and depreciation on your car when used for business
  • Home office
  • Legal and professional fees
  • Rent for office or storefront space
  • Salaries and benefits
  • Telephone and internet 
  • Business Travel 

Talk with a tax professional to make sure you maximize all of your possible deductions.

A variety of tax credits, grants, and refunds are available to businesses for going green. Many states offer tax deductions for implementing energy-efficient programs or updates to your business. Individual cities also offer incentives for using energy-efficient appliances, solar, and more. Research your state and local energy tax incentive policies to see what programs are available to you.

All small business deductions are available to sole proprietorships, as well as C-corps, S-corps, partnerships, and LLCs. Different rules may apply to each type of business entity. Talk with your tax professional to find out what specifically applies to you. 

The Self Employment income tax rate is 15.3% and is split into two parts: 12.4% goes to social security and 2.9% goes to Medicare. Business owners, independent contractors, and freelancers must pay the Self Employment tax if their earnings are above $400 for the year. This is in addition to the regular income tax.

Some business insurance policies can be tax write-offs for your small business. These may include property insurance, liability coverage, malpractice insurance, workers’ compensation insurance, vehicle insurance, and employee life insurance policies that are provided by the business. Additionally, the cost of the business owner’s health insurance and business continuation insurance are tax deductible.