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Deductions for Small Businesses

Having your own small business is exciting, challenging, and life changing. Yet, there are still important obstacles to overcome on the way. It brings obligation, hard work, and every ounce of sweat and tears with all the down payments, investors, licenses, and permits. Not to mention fees, supplies, and employment wages that come with it. As a small business owner it's not easy to make a living and then at the end of the year having to go back to the first month and figure out your net income, have it be reported to the IRS and having to owe what seems to be a ridiculous amount of money. Luckily, there is help and it comes in the form of a deduction. A very simple, yet powerful tool that comes from spending out of pocket towards your business and helps reduce the amount you may owe the IRS.

Now you may have heard of this before, but want to know what they are in more detail. You have came to the right place. Now for any deduction you want to have two key elements.

1. All business related purchases used with one specific business card.

2. All business related purchases are backed up with a receipt.

These include:

1. Gas

(Ex: Only when for business trips)

2. Supplies

(Ex: brushes, paints, tissues, staples, tapes, sticky notes, notepads, glue, etc.)

3. Machinery

(Ex: Printers, laptops, PC, tablets, cellphones for business use, forklifts, etc.)

4. Licenses/permits

(Ex: When renewing a license or a permit the amount paid may also be used.)

5. Uniforms (Ex: This may also include formal wear)

6: Safety gloves and shoes

7: Employee wages

8. Charity Donations

9. Cellphone expenses

10. Advertising

11. Meals

(Ex: When traveling for a business trip)

12. Casualty losses:

(Ex. Accident, fire, theft, & natural disasters)

13. Real State Tax

14. Previous year tax return costs

15. Repairs and maintnance

(Ex: To a machine or even a vehicle)

This list can go on and not limited to these options. A great idea to help stay organized through the year is by at the end of every month to keep track of all expenses and to have them in specific categories. So, by the end of the year you simply need to do is add all of them for your final year deduction. Not only does it help with taxes, but helps keep track into seeing where the money is headed.

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