As a business owner, this is the time you realize that bookkeeping records, business transaction receipts and other important paperwork indicate that they have to pay more than you expected. To help you and your business come out on top, take some time to analyze these tax deductions and incentives.
If your business is providing health insurance coverage to employees, then it may be eligible for a tax deduction. To qualify, a small business must at least half of their employees’ health insurance premiums ,which amounts to 35% of the total premiums paid. To check how much you qualify for, you can use the small business tax credit calculator provided by The National Federation of Independent Business (NFIB).
New and Used Hardware and Software Purchases
Has your business purchased any new or used equipment? Well, if the equipment purchased complies with Section 179 of the IRS code, you have qualified for a tax deduction amounting to the full purchase price of the equipment. The total deduction limit is $500,000.
Educational Assistance Programs
Tax incentives on The Educational Assistance Program are meant to provide incentives for business owners to support advanced training and education of the employees. This tax break covers equipment, books, tuition, and supplies and is applicable to both graduate and undergraduate studies.
Home Office Deductions
Are you self-employed with your own home office? If yes, then do not hesitate filing for a home office tax deduction. However, there are a couple of guidelines that should be followed to prove that your office is legitimate. For instance, you must have allocated a certain portion of your house specifically for business purposes. Some of the tax breaks that can be made from a legitimate home office include; Painting and repairs, Real estate taxes, Mortgage interest and utility charges. Beginning in 2014, Self-employed home office owners will start enjoying a $5 per square foot tax deduction on the space occupied by the business.
Cell Phone Deduction
Small and medium sized business normally use cell phones at the expense of land lines as their main mode of making business conversations. As a business owner who relies on cellphones for communication, you can claim tax credit for the business use of the phone. You only need to ensure that you spend 40 percent of the time on business conversations.