Finance

Tax Deductions for Small Businesses to Reduce Your Tax Bill

business tax returns online
Written by Ralpha

If you own an online store, allocating a portion of your revenues to tax-deductible business expenses can help your company grow while also saving you money come tax time. Even day-to-day expenses, such as excursions to the post office or your home office’s electricity bill, can save you money if they’re recorded in your small business accounting records.

Let’s take a look at a few significant write-offs you can take this year from your eligible business income:

Shipping

It’s your responsibility to deliver the goods unless you’re running a dropshipping firm. Fortunately, the IRS regards the cost of doing so as normal and essential. Postage, shipping meter subscriptions, and delivery fees are all tax deductible. Still, spending less for delivery in the first place is preferable.

Repairs

A necessary home office repair, such as replacing a broken window, can be claimed as an expense on your business tax returns online. You can also report an enhancement to your home office, but it must be depreciated over a period of up to 27.5 years. Work on your home office that entails “betterment, adaptation, or restoration”—for example, installing a larger window—is classed as an improvement. Consult your CPA before paying for a renovation or repair to ensure you’re classified appropriately.

Bank Fees

Anything you pay in interest on a business credit card or a small company loan throughout the fiscal year is tax deductible. Your bank’s fees for maintaining or utilizing your business bank account are the same.

business tax returns online

Legal Fees

You can deduct an attorney’s expenses if you engage or retain one to produce contracts, file trademarks and copyrights, negotiate leases, defend your company in court, or perform other services for your company.

Debts

Customers or clients will occasionally refuse to pay for a product or service that you have already supplied. You may never get that money, no matter how many statement reminders you send. These are referred to as bad debts. Uncollectible accounts, often known as bad debts, are amounts owed to you by a customer or client that you are unable to collect. If it turns out that the debt is uncollectible, you can write it off at the end of the first year.

While you’re at it, help your business thrive and save money on taxes. The expense of advertising is a tax deduction, whether you advertise on Instagram or in your local newspaper. This includes the cost of placing the ad as well as any fees for having it written and designed. If you hire a designer, copywriter, or other marketing expert to create ads for you, you deduct their pay just like any other 1099 employee.