Startup Spark

Are you leaving money on the table?

by ShannonCherry on February 20th, 2008

I just learned more than 65% of small business owners do their own taxes.

Frankly, I don’t think that’s too smart. Each yea, small business owners give away millions of dollars to the US government simply by overlooking some deductions that are eligible for. That’s why I have a bookkeeper and accountant.

But if you must do  it yourself,  I want to share a few tax deductions many forget to take:

1.  Sales tax.  If you’re a sole proprietor or just starting out, you can deduct the sales tax you spent on equipment and supplies, among other things.
2. Bad debts and business write offs. Unpaid customer accounts that will be written off as worthless debts as well as any documented losses due to theft or fraud (not already covered by insurance) are deductible, but only if the revenue was at one time included in your business’s gross income.
3. Bank fees and finance charges ­ Many of these business costs are deductible from both sides of the transaction equation buyer and seller. So, not only can you typically deduct fees and interest charges on your own business credit cards, you can also deduct service fees charged by the bank for accepting your customer’s credit cards.
4. Advertising. A big one that should never be overlooked, as almost all advertising and promotional expenses, even the cost of printing up your business cards or donating an item to charity, can be deductible.
5. Mailing Costs. Postage, postal meter rental fees, and shipping costs that your small business pays are tax deductible.
6. Startup Costs. Many of those expenditures a company makes before it actually starts doing business can be written off including market research, advertising, employee recruiting, lawyers, accountants, consultants, rent, & office supplies.

Hey, just a reminder that I’m not a tax expert and that you should probably check out if these deductions are right for you by going to a professional.

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POSTED IN: Entrepreneurship, Home-Based Business, Starting a Business