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Tax Savings for New
Businesses
Many people form new
businesses and spend money, but don't know what qualifies as a
deduction and what does not.
It's important to know which deductions can be taken, and
that most deductions must be sufficiently documented.
Some items can save you
money once you're in business.
For example, a home office can be deducted. If the space is devoted to
your business, you can deduct your home office. If only a portion of the
space is used for the home office, then a portion can be deducted as
well, so it doesn't have to be all or nothing. | |
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In addition to the home
office deduction, business supplies and furniture can serve as
deductions.
If you
require pens, paper, printers, computers, etc., then you can deduct
these items as well.
This could also include furniture - desks and chairs, for
example, assuming they are used exclusively for the business. For furniture, you can
also depreciate it - deducting a portion of the expense over seven
years.
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If you travel for
business, including mileage, you may be able to deduct
it. Remember, you
have to keep accurate records (including dates of travel and
mileage) just in case.
Also consider deducting your car lease. In addition, hotel
stays, air expenses (and all expenses while on travel, with
the exception of meals) are tax deductible.
Retirement, Social
Security and health premiums are also deductible if you own
your own business.
Remember, if you own a
small business, you have to pay double the Social Security
contributions you would as an employee. Federal law requires
employers pay half and the employee pay half, and
self-employed individuals qualify as both, but half of the
contribution can be
deducted.
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Starting a new business is risky, but the deductions can be
significant.
Also, to minimize risk associated with a new business, it's
wise to have the appropriate insurance, and it may also be wise to
form a corporation or LLC - which can give additional tax savings,
as well as protection of personal assets.
To form a Corporation or
LLC, call us at 1-877-692-6772 to get started on
the filing process right away. MyCorporation can
help file the paperwork for FREE - waiving our
regular service fee of $149. |
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