A lot of meticulous financial planning and well-thought out tax strategies are involved with the running of a successful business. And yet, while tax strategies are so undeniably important, so few business owners misunderstand, and therefore miss out on, a lot of common tax deductions. 

Important for the reduction of taxable income as well as enhanced profitability, some tax deductions can be incredibly beneficial. But when these deductions are misused or misunderstood, the scrutiny of the IRS may be incurred, and money may be lost. For this reason, many small business owners choose to seek professional help with tax planning in Coral Gables.

To help you recognize and benefit from some key business tax deductions, here is a brief rundown of those that are most commonly overlooked:

• Office expenses and supplies

From printer cartridges and paper, to computers and other such equipment, all legitimate office expenses can be included when filing your taxes. And if you work from home and the space is used for your business exclusively, some of the expenses involved like rent or mortgage interest, utilities and internet, might also be deductible.

• Vehicle and mileage costs

When your car is used for business purposes, you can choose to deduct the standard mileage rate as set by the IRS every year, or the actual expenses related to the vehicle, like gas, insurance and maintenance. Note that an accurate log of all vehicle related costs is crucial if your claim is to be supported.

• Business meals

Provided meals with clients, employees or partners is directly business-activity related, you may be eligible to deduct up to 50% of their cost. Again, an accurate and up-to-date log of all such activities is essential. 

• Travel expenses

From air and taxi fares, to lodging and meals, many of the costs associated directly to business trips, may be deductible. Keeping an accurate record of all such expenses is important, and remember that any personal expenses incurred during a business trip, are not deductible.  

• Employee compensation and benefits

Including bonuses, commissions, salaries and health insurance premiums, many ways in which employees are compensated, present business owners with opportunities for tax deductions. 

• Professional fees

Fully deductible, payments made to such professionals as attorneys, accountants, and consultants among others can be logged and reported when filing your taxes. 

• Advertizing and marketing

As important as marketing and branding investments are, they are also fully deductible, including such things as print and digital ads, promotional materials and social media marketing. 

• Asset depreciation

For equipment or property belonging to a business that depreciates over time, such as machinery, furniture and computers, these can be deducted using one of two different methods: straight- line or Section 179. A tax professional can advise you as to which tax strategy might best suit your needs. 

Properly claiming deductions

Audits and penalties may arise from deductions that haven’t been claimed properly, so be sure to do the following to stay compliant and make the most of any deductions you may be eligible for:

• Keep accurate records
• Keep personal and business finances separate
• Understand IRS requirements
• Hire tax services in Miami to carry out an annual review

There may well be more tax deductions that your business is eligible for, and working with a tax professional is the best way to ensure that you’re maximizing your deductions while staying on the right side of the law.