![]() ![]() IRS Reference: Publication 535: Advertising Expenses Business Insuranceīusiness insurance includes any kind of protection required to run a business safely. Some businesses also use large advertising mediums like billboards and television commercials. This includes but is not limited to logo creation, printing business cards, website updates, printing costs, and social media marketing. IRS Reference: Publication 535: Supplies and Materials AdvertisementsĪny expenses directed toward advertising, marketing, and/or promotions is a tax deduction. Tip: Use net 30 vendors for purchasing office supplies to help build business credit Small business owners can deduct the entire office expense by using write-offs on the cost incurred on the incidental materials and supplies. Generally speaking, office supplies refer to those that are used to run day-to-day office activities, such as papers, pens, sticky notes, ink, printing, postage, and delivery services. Get a dedicated business bank account with a tax optimizer to help you save money at tax time. Note: The average freelancer/contractor overpays on their taxes by about 21%. IRS Reference: Publication 535: Business Start-up and Organizational Costs This deduction does not apply if you have more than $55,000 in startup costs. For example, if your total startup expenses total $51,000, your allowed deduction will be $4,000. If your startup expenses exceed $50,000, the total deduction will be reduced by however much your expenses exceed $50,000. If you have $50,000 or less in startup costs and are in your first year of business, the IRS allows you to deduct $5,000 in startup costs and $5,000 in organization costs as a tax deduction. IRS Reference: Topic 554: Self-Employment Tax Startup Business Expenses ![]() ![]() Visit our LLC vs S Corp guide or use our S corp calculator to see what's right for your small business. Note: LLCs taxed as an S corp can save on self-employment taxes under the right circumstances. However, if you’re self-employed, you can write off half of your self-employment tax as an income tax deduction. Self-employed individuals, including independent contractors, freelancers, and business owners, are responsible for paying both income and self-employment taxes on their income. Below, we have expanded upon the most important categories that can qualify for deductions with their IRS-imposed limits and restrictions. It’s important to understand the subtleties of what is and what isn’t considered a write-off. We like Freshbooks, which we cover in-depth in our Best Accounting Software review. You’ll need accounting software to manage your business. Remember, it's crucial to keep detailed records of all your business expenses for tax purposes. Professional Services: Fees paid to attorneys, accountants, consultants, and other professionals can be written off as business expenses.Depreciation: For long-term business assets like machinery or buildings, you can write off the loss in value over time.Health Insurance Premiums: If you're self-employed and pay for your own health insurance, you may be able to write off these costs.Home Office: If you use a part of your home exclusively for business, you can write off a portion of your home expenses.Office Supplies and Services: Everyday business essentials, from computers to stationery, are tax-deductible.Vehicles: If you use a vehicle solely for business purposes, it can be a tax write-off.Business Travel Expenses: Costs related to business travel, including meals, accommodation, and transportation, are deductible.Start-Up Costs: Initial expenses to get your business off the ground can be deducted in your first year of operation.Charity and Gift Contributions: If you make charitable donations through your LLC, these can often be written off.Self-Employment Tax: When you run an LLC, you can deduct a portion of your self-employment tax.Just imagine how much you can save on your taxes with write-offs like: Running an LLC comes with some amazing benefits, including tax write-offs that could save you a bundle. ![]()
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