Running a small business is not easy, especially during the first few years. No matter how much time, energy, and money you put into your company, you can never guarantee it’ll succeed. In fact, of the 450,000 businesses launched in the U.S. every year, about 33% don’t make it past two years.
However, if you plan smartly, and partner with an experienced small business accounting firm, you can give yourself a good shot at long-term success.
Committing to savvy financial practices and capitalizing on strategic ways to improve your bottom line are just two of the many ways to help your small business survive the initial launch.
Too many small business owners aren’t aware of the potential for tax deductions to help them get ahead in today’s competitive market. There are several options that you may qualify for, and not even know it.
Launching a new enterprise makes you eligible for dozens of possible small business tax deductions, and here are five that you should look into. Industry Education One of the best ways to sharpen your management skills and improve your business is by furthering your education, and there are ways to write off these expenses.
If you completed an educational course or training program, you may be eligible to claim what the IRS calls, “business deductions for work-related education.”
Just keep in mind, there are restrictions with industry education write-offs. For instance, you cannot deduct education outside of your current industry or field. Startup Costs You may be able to deduct a portion of your small business startup costs -- up to a combined $10,000 in startup and organizational expenses during the first year of business.
These costs can include things like market research, employee training, business-related travel, advertising, legal counsel, and more. Ask your small business CPA which of your expenses are best to deduct as startup costs on your taxes. Company Transportation While automobile usage tax deductions are some of the most scrutinized deductions on small business filings, it can be worth it if you’re frequently traveling for work.
As long as you are meticulous with your record-keeping, you may claim valuable tax deductions for automobile and air travel. This includes new or used vehicle purchases, fuel, tollway and parking fees, rental cars, and many other options. Legal and Accounting Fees Businesses, both small and large, can benefit from hiring attorneys and certified public accountants (CPAs) to help manage their business’s operations, documents, and finances.
If you have either of these professionals on your payroll, it’s worth looking into this small business tax deduction. Even if you are a sole proprietor, you may be able to deduct the costs of hiring a CPA firm. Insurance In order to protect your property, employees, and other assets, various types of insurance are often mandatory for small businesses to carry.
Thankfully, most insurance costs are deductible in your yearly filings with the IRS, including business malpractice, owner’s policy, and continuation insurance. Small businesses may also claim tax credits for health insurance, so ask your accountant if you’re eligible.
This year, set your business up for success by exploring all of your potential small business tax deductions.