Building a small business is no small task. Thankfully, the Federal Government has provided tax laws to help the small business owner along in his or her mission.
The United States’ economy was built on the freedom of entrepreneurship and free enterprise. Therefore, it shouldn’t surprise us that the government rewards people who utilize that freedom.
According to Small Business Trends, here are five tax deductions the small business owner can anticipate in 2019:
Car and Transportation Expenses
The cost of using your vehicle for your small business ventures is deductible. In addition, you can apply this deduction to not only owned but also leased vehicles. You may record your usage by mileage, gasoline charges, and oil changes. However, the IRS has provided the standard mileage rate of 58 cents per mile in 2019. This method of recording simplifies the deduction process.
Wages and Salaries
You get paid for paying others! Wages allotted to employees, including bonuses, salaries, commissions, and taxable fringe benefits, can be categorized as deductible business expenses. However, payments to partners, proprietors, and LLC members are not defined as wages because the payees are not employees.
Contract Labor
Most small businesses take advantage of independent contractors and freelancers to meet labor needs. The costs spent on contract labor counts as a deductible. If the contractor earns $600 or more completing tasks for your business, issue Form 1099-MISC for yours and their tax protection.
Supplies
Typically any type of business demands simple supplies to cover administration needs. Supplies define all material expenses from products that your business hinges on to dividers to clean up the filing cabinet. For your small business, you may file a deductible for the money you spend on these necessary supplies.
Utility Expenses
Light, heat, and mobile phone charges are entirely deductible beneath this rule. If you rent a facility in which you operate your business, electrical expenses are deductible. However, if you claim a home business, you must establish a second landline to claim the deductible utility cost.
Whether you owe money to the IRS or you have a State tax debt, our staff of Enrolled Agents and Tax Professionals can help you! We have over 50 years of experience negotiating with the IRS in all 50 States.