Small Business Tax Tips How to Deduct Anything - Davidliam/Edu-Technic GitHub Wiki

Looking for an easy way to know exactly what you can and cannot deduct on your income tax return? Knowing what is deductible and what isn't deductible has mystified small business owners for decades. This article should help you see the big picture.

Running a small business is about more than knowing your product and your customer. You also have to manage your expenses, deal with payroll for employees, and keep all of your federal, state, and local tax information straight. Tax laws are complicated enough for individuals; for a business owner, they can seem downright incomprehensible. Plus, even an innocent tax error can yield serious consequences. Whether you plan to work with a professional tax consultant or are confident in your own tax filing abilities, you should take certain steps to ensure your financial future.

In this article, we'll give you some tips to help you realize the best ways to optimize your taxes.

• One interesting write-off that many small business owners fail to realize is their health insurance. The taxing laws dictate that self-employed people may write off a full sixty percent of their health insurance costs, saving them potentially thousands of dollars. 

• When considering employees for your business, think family first. If there are people in your family that can help you to operate the business, you can allow them to take on some of the income of the business, allowing you to put your earnings into lower tax brackets, assuming the relative performs some type of service to the business.

• Another aspect often neglected by uninformed small business owners is the prospect of a retirement fund. You can contribute to a qualified self retirement fund which is completely tax-deductible in your returns.

• The first-year expense limitation for any small business is now $19,000. Don't forget to write off any business-related practices, including taking potential clients to lunch, or golfing, or whatever situation may merit as an expense. One technique often employed when it comes to lessening the taxes that you face is to buy supplies that you know that the office will need in the coming year early so that you can write them off. While it's not a permanent solution, it can defer the damage your taxes do to you.

Keeping track of your financial records and keeping a clear separation between expenses made for yourself and those made for your business can really ease your struggle come tax time. Being organized and having a plan can save you both time and all-important money.

But what most taxpayers do not realize (and the IRS is in no hurry to tell you this) is that most deductions are not specifically mentioned anywhere in the tax code. By that, I mean this: most allowable deductions are not said to be deductible or non-deductible. Getting confused? Bear with me to learn more.