Tax Deductions for Your Small Business

Tax Deductions for Your Small BusinessIt’s that time again! The Tax Man cometh, and for small business owners, this can either mean severe anxiety or severe excitement. Before you start researching stress relief methods, take a look at our list of small business tax deductions you may not have considered in the past.

Labor Costs

As a small business owner, labor costs are likely your biggest expense. That’s why it’s a good thing they’re totally tax deductible—this includes payroll, benefits, employment taxes, and overtime payments. If you employ independent contractors, their wages are also tax deductible. Got payroll software? Yep, that expense is also a deduction. Add another line item to the list of reasons your staff are priceless! They keep your business running, and they’re even better around tax time.

Food Costs

Sounds a little counterintuitive, but restaurant owners can deduct their business’s food and beverage costs from their taxable income. That’s right—the second-largest expense restaurant owners have (next to labor) can be deducted. Anything from cayenne pepper to fresh turkey to those spoiled loaves of bread that never even made it to a table counts.

Professional Services

Say you hired a consultant to help you get your business up and running. Or you partnered with a marketing agency for a brand refresh. Maybe you had a lawyer who helped you navigate the startup process. These professional services you relied on to maximize your earning potential are totally tax deductions.

Office Expenses

Anything from office chairs and whiteboards to lightbulbs and printers is considered an office expense in the eyes of the IRS. And office expenses are—you guessed it—tax deductible. Just be sure the supplies you’re deducting were purchased in the year for which you’re filing, and definitely hang on to those receipts! The government loves a paper trail.

Staff Entertainment

Did you have a huge office holiday party last year? Host a BBQ for your staff and their families? Take your employees to a team-building event? No sweat. Those costs can be deducted, as can the costs of entertaining your clients. According to Shopkeep, “for client meals and entertainment, you can typically deduct up to 50% of the cost provided that at least one employee was present and the meal was not lavish.” Check out Shopkeep’s comprehensive list of meal deductions and their percentages here!

On a final note, don’t forget that the interest you pay on any small business loan from ARF Financial—whether it’s a line of credit, bridge loan, or Flex Pay loan, it’s tax deductible. And that’s just another reason why turning to ARF for all of your business’s financing needs makes perfect sense, year in and year out.