Tax season is one of the most dreaded times of year for many, particularly business owners. For them, tax season means more work, as they work to gather all their receipts and documents and hope they don’t owe any money. Fortunately, business owners–especially those with flooring businesses–have many potential deductions and write-offs that can help max out their tax benefits; it’s all about knowing what qualifies and how.
Here are 10 tips and deductions to help max out your tax benefits for your flooring business.
10 Tips and Deductions to Gain Tax Benefits
1. Write Off Your Travel
One expense write off to never overlook is travel expenses. You can write off hotels, airfare, rental cars, meals, tips, dry cleaning, and any other travel-related expenses you may incur. Not all travel qualifies for this write-off. To qualify, the travel must:
- Take you outside of your service area for more than a day
- Be work-related, including jobs, conferences, meetings, etc.
Whenever your travel meets these conditions, save all your receipts to write them off when filling out your taxes.
2. Track Work Vehicle Expenses
Most flooring businesses have specific work vehicles used to transport equipment and products to and from jobs. You can write off all of the expenses related to these work vehicles. These expenses include gas, maintenance fees, tags, toll road fees, and more.
If you don’t have a dedicated work vehicle but use your personal vehicle for work purposes, you can still make deductions. In this scenario, you will have to keep track of your business-related mileage to write off when filing taxes.
3. Home Office Deductions
As a flooring business owner, you need an office to be able to do your work. If you have a dedicated office in your home, you can deduct any office-related expenses from your taxes. Possible expenses include a portion of the following:
- Rent or mortgage
- Utilities
- Internet
- Office supplies and equipment, like special programs, printers, ink, and a computer
For your home office to qualify, it must be a dedicated office space, not an area in another room you use for work.
4. Use Cash-Basis Accounting
Cash-basis accounting refers to recognizing the cash you receive, not what was earned. That means income from credit accounts is not included until it is in your business account. Using this method instead of accrual-based accounting can be more beneficial as it will ensure you only pay taxes on the money you have received.
5. Phone and Internet Expenses
Phone and Internet are crucial to any business, especially flooring; without these, you will get little to no business. You can also deduct these expenses from your taxes, with some caveats.
You can deduct the full expense from your taxes if the phone and Internet services are solely for work. If the services double as your personal phone and Internet, you can only deduct the business portion of the expenses.
6. Bank Fees and Interest Rates
Two surprising business write-offs are bank and interest fees. You can write them off in your taxes if you have business-related interest fees from loans and credit cards or business banking fees.
7. Write-Off Advertising Expenses
Advertising isn’t always cheap, but it is necessary to grow your business. Since it is a type of business expense, it is another item you can write off on your taxes. This includes ads in the newspaper, social media marketing fees, Google PPC costs, and any other advertising expenses you may incur.
8. Networking Events
Networking is vital for any business and, like travel, can be deducted from your taxes. This includes all event-related expenses, like entry fees and business card purchases.
9. Business Meals
Maybe you treat your employees, prospective customers, or business partners to a meal. Whoever you treat, you can deduct 50% of that cost from your taxes. You must keep all of the documentation, including the date and where you went, the business relationship, and the cost.
10. Ongoing Education
Another write-off is any ongoing education, or education that is not required, but that you choose to complete in order to further your career. If you choose to complete further education, or pay for your employees further education, you can claim it on your business taxes.
Possible ongoing education deductions include any books and reference materials, including ebooks, magazine and newspaper subscriptions, and audiobooks.
Workshops, training programs, online courses, conferences, and other lectures are also qualifying expenses.
Saving the Most on Your Taxes
Everyone dreads tax season, business owners more than most. It doesn’t have to be stressful or confusing as long as you take your time and know about the different tips and deductions you can claim.
With these write-offs and deductions in mind, tax season will be very different–and you could find yourself potentially saving hundreds.
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