Are you a business owner who is paying more tax than necessary by not making all the important deductions on your income? If the answer is yes, then this article is for you! Making deductions from your business income is not as easy as it sounds. However, with the help of our expert accountants, you don’t need to worry about dealing with this process on your own!
CPA4IT’s expert team of accountants can help you retain more of your hard-earned money inside your corporation by devising tax strategies that help small business owners increase their net worth and decrease their financial stress. Looking to discuss this further? Don’t forget to click here and book a FREE consultation with one of our experts to discuss this further.
Make sure to read the entire article to learn about different deductions which may be applicable on your business income.
Importance of Making Deductions?
Deductions include all the expenses that are to be subtracted from a taxpayer’s income. This decreases the amount of income that is subjected to taxes. As a business owner, you are allowed to deduct all expenses related to the cost of doing business.
The most important benefit of making deductions is that it reduces your tax liability. Therefore, you can retain more income inside your corporation.
How to deduct Expenses?
The most crucial part of making deductions is to keep an accurate record of your expenses. This includes saving all your receipts with a note that explains their business purpose. It is strongly recommended to create a digital record of your receipts. This ensures that you have all your expenses organized and ready to file. Keeping a digital record also minimizes the risk of losing receipts or forgetting how a certain expense relates to your business.
Expenses That Are Often Overlooked While Making Deductions
Advertisement is a necessary expense since it is incurred to generate or keep customers. For this reason, it is allowed to deduct this expense from your taxable income.
- Automobile Expenses
The cost of automobiles that are used for business purposes can be fully deducted from your income as a business expense.
- Meals and Entertainment
Meals and entertainment expenses can also be deducted from your gross income as a business expense.
- Home Office Expenses
It is permissible to deduct the expense for business use of your workspace from your home if that space is being used to conduct business activities or to meet clients of your business.
Your cell phone expenses can also be deducted as a business expense from your taxable income.
The expenses incurred while traveling for business purposes can be deducted from your income as a business expense.
Useful Tools to assist you with Deductions
There are several tools and software which can make the deductions process extremely efficient.
- QuickBooks Online
QuickBooks Online allows you to keep a detailed record of all your expenses. This platform assists business owners in making all the calculations for source deductions directly from their income. As an Elite QuickBooks Pro-Advisor, CPA4IT gets access the absolute lowest wholesale prices on QBO and we pass those savings on to you!
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- Wave Payroll
This is another useful accounting tool for businesses. Wave Payroll offers a list of services, including:
- Unlimited invoicing
- Double-entry bookkeeping account features (balance sheets, general ledger, income statements, journal entries, and more);
- Syncing with bank accounts and credit cards easily; and
- Frequent upgrades and improvements.
CPA4IT is a listed Wave Pro-Advisor. So if you’re already using Wave, or looking to create a Wave account, you can sync it with your CPA4IT account and transfer all your financial data with just one click!
Having a Hard Time Making Deductions? Still not sure about how to maximize your deductions? Don’t worry. We’ve got you covered! Our team of expert accountants will take care of all your financial responsibilities to put you in a healthy spot. Our goal is to help you organize your finances, create wealth, and transform that wealth into a legacy. Don’t forget to click here and book a FREE consultation with our team of experts to discuss this further.