3 Tax Deductions You May Have Missed

Well, it’s that time of year again.  No, not saying farewell to Downton Abbey and hello to binge watching House of Cards.  Although…

It’s tax season!  For many of you, that is already a thing of the past, since you have met with your amazing CPA.  For the rest, well, let’s look at some possible tax deductions you may be missing.

1.       Taxes

So you can write taxes off your taxes?  That’s not crazy talk; that’s true!  For example, the property taxes you pay for the building you own and operate your business in (businesses operated out of your home count, too) are tax deductible.  Keep in mind, these taxes are only eligible to be deducted in the year they’re paid.

In general, the four types of deductible non-businesses taxes are:

1. State, local, and foreign income taxes.
2. State, local, and foreign real estate taxes.
3. State and local personal property taxes.
4. State and local general sales taxes.

For a more in-depth look at deductible taxes and how to claim them, check out Topic 503 on the IRS website.

2.       Advertising

This includes pay-per-click ads, print ads, event sponsorships, and even business cards can be deducted, as long as there is a clear association between the expense and your business.  Quick note: if you sponsor an event , make sure that the event’s materials mention your business as the sponsor, not an individual participant.

3.       Bad Debts

Did you know that not everyone pays their debt back?  Yeah, of course you did.  Instead of complaining about it on Facebook , you can spend that energy deducting this bad debt from your taxes.

Examples of deductible bad debts include:

• Credit sales to customers (#1 offender)
• Loans to clients and suppliers
• Business loan guarantees

Review IRS Tax Topic 453 for more information on how to deduct bad debts.

*Disclaimer: To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

If you have any questions at all, contact Hardee Accounting!