Small Business Tax Deductions

Business Expenses List

As a business owner, you incur expenses to maintain the operations of your business. These expenses can eventually help you reduce your taxable income. Any business expense ranging from the purchase of equipment and tools to advertising your business can be tax-deductible.

Since there would be a ton of business expenses that could be pages long, we are not going to list each and every one of them. But what we will do is compile them into categories that is easy to understand. So you know whether you can claim certain expenses incurred for your business can reduce taxable income or not.

Understanding Business Expenses

First and foremost, most of your business expenses will grant you a tax deduction. While some of these business expense deductions are going to grant you only a portion of the actual expense, some will be the dollar for dollar. This means you will be able to deduct the total cost of the expense from taxable income.

Generally speaking, all of your expenses as long as they are related to your business will reduce taxable income when the tax season arrives. Whether you are self-employed with no employees or have employees working for you, the following business expenses are a great way to reduce taxable income—allowing you to pay less tax.

Purchase of Equipment and Tools

The purchase of any equipment, tools, or supplies you need to sustain your business is qualified business expenses. This can be anything from but not limited to printers, hardware, computers, equipment for technical needs, etc.

Even the expenses of paperwork are tax-deductible. So printer inks, papers, pens, and so on will grant you a deduction.

Employee Bonuses and Costs

Having employees working for you is certainly a cost but it doesn’t end with payroll. If you offer certain benefits to your employees such as mileage reimbursement or company health insurance, the cost of it will help you reduce taxable income. This also applies to the cost of hiring accountants, business consultants, bookkeepers, etc.

Insurance

Other than the health insurance you provide for employees, the premiums you pay for insurance for your business is a qualifying business expense as well. This includes premiums paid for health insurance premiums, general liability insurance, workers’ compensation, and more. There isn’t much of a limit when it comes to deducting the cost of insurance for securing your business.

Advertising and Marketing Strategies

Last but not least, costs associated with marketing and advertisement to reach a bigger audience are deductible. This can be the cost of a billboard near your business location, digital marketing, purchase of artwork, or hiring someone to do artwork for marketing purposes. Basically, any cost that is associated to advertising is tax-deductible.

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