Fact Sheet: Tax Breaks for Small Businesses

Knowing the right tax breaks to take for your small business can help ease the pain a bit come tax season and give you a leg-up on the competition. When we provide business consulting and tax planning services here at Steiner Business Solutions, one of our goals is to open the eyes of our clients to the world of available deductions they can take. We’ve rounded up a few here to help get you started on saving money come tax time.

Self-Employment Tax

If you’re self-employed, listen up. All employees, whether self-employed or employed by a business, pay Social Security taxes and Medicare taxes. But when you’re self-employed, you’re responsible for both pieces of the pie: the half paid by the employee, and the half typically paid by the business. This is known as the self-employment tax. While that may be discouraging, there is a bright spot. You can deduct the portion of your self-employment tax that an employer would typically pay.

Advertising

When you’ve got a small business, getting the word out is crucial. Advertising fees tend to add up quickly as you purchase ads in print and online, snag a few radio spots, print business cards, and create an eye-catching website. Some businesses also hold conferences and seminars to gain facetime with new and potential clients. If you’re just starting out, you’ve likely spent a good deal getting your branding together in the first place, from your logo to slogans and graphics. The costs associated with all this can go down as deductions on your tax return.

Business Loan Interest

Debt is another aspect of owning a business, small or otherwise. For any loans your business takes out, the interest is fully deductible. But it’s important to remember that this is for loans taken out by the business. If you own the business, and you take out a personal loan for the business, that’s not the same thing, and the same deductions do not apply.

Insurance Premiums

Malpractice insurance, workers comp insurance, liability insurance—running a small business requires a good, long conversation with your insurance provider. This, in turn, requires a sobering looking at your finances as you pay those insurance premiums. When you do, take a little comfort in the fact that those premiums can be deducted when tax time comes around.

Office Supplies

Pay attention to this one: You can deduct the cost of office supplies. Many small business owners tend to overlook this key deduction. They’re focused on larger costs, like the ones we’ve described above. Who’s got time to keep track of $1 packs of sticky notes? Make time. Those small purchases add up in a big way. Don’t believe us? Track them for a month and you’ll be amazed at how much goes to pens, toner, paper, and more. When you see how much it all adds up to, you may be that person counting the number of pens in the cup on the conference table after every meeting. Small purchases add up to large costs, and in turn, large deductions.

We’ve only scratched the surface here. To learn about more tax deductions you can take for your small business, contact Steiner Business Solutions in Richmond, VA.