Running a new business comes with a lot of expenses, so leveraging any tax write-offs possible can be extremely helpful come tax time. While most people know that they can write off basic office costs, they may not realize their upgraded equipment, business cell phone bill, and even some business meals may also be deductible. It’s critical to save receipts for all business-related expenses including the ones you may not be sure about.
If you do any business with the UK or you purchase essentials for your business from the UK, you may be able to claim what’s called a VAT refund in UK. This refund is provided for expenses like entertainment, events, marketing, and even some travel costs. This VAT refund can be claimed by businesses that are located outside of the UK as well as those in the UK. This is great news when you purchase services and goods overseas because it can help you reduce not only your tax liability in your home country but also qualify you for a refund of a portion of your expenses.
Child Care While Your Work
Running a business is a full-time job. In most cases, you can deduct some of your childcare expenses while you work your business. Often, it must be through a licensed childcare facility, as opposed to having a family member or friend watch your child for it to qualify for the deduction. This deduction can help make it more affordable for you to find great caregivers for your children while you start your business.
Certification and Education
Some business owners continue their education through seminars, online courses, and even college courses. This improved education helps them to better serve customers, offer additional services, and broaden their expertise. The great news is that many of these courses and certifications are tax-deductible. It’s important to save your receipts and evidence of your completion of your courses so that you can claim them in the right place on your business taxes.
Expenses Directly Related to Startup
Creating a new business is expensive. There are plenty of costs associated with getting your business up and running. Some of them include moving costs, travel costs, and even training expenses. These expenses are all deductible up to a certain amount when you first launch your new business. You’ll find that you have more expenses to deduct than you thought when you finally get around to adding everything up.
Social Media Marketing
Are you using a social media marketing strategy as part of your cost of doing business? These marketing costs and others like them are typically a tax write-off for businesses. Because these expenses help you connect with customers, manage your social media profiles, and even market your products and services, they qualify as legitimate business expenses. This is true no matter what social media platform you are using.
Fees for a Lawyer
Did you hire a legal professional to write up contracts for you? Did you ask them to help you set up your business the right way? This important expense is also tax-deductible as long as the legal fees were not for personal needs. Using a business lawyer to help you create the right legal structure for your business is one of the many costs of doing business.
Paying for Contract Work
Did you need to outsource any part of your work? Did you use contractors to complete different projects? Paying for this extra help can not only free up time for you to focus on more important work, but it can also serve as an excellent tax break when you go to file your taxes each year. And now, because of new IRS rules, if you use certain 3rd party vendors like PayPal to pay for this work, it’s easier than ever to not only submit payments, but it also means you may not need to send out any other tax forms at the end of the year to your contractors.
While none of this should be construed as tax advice, it is important to know that there are many deductions that you may or may not know about that can help reduce your tax liability when you are running a small business.