Today we’re talking tax deductions, what they are, what qualifies, and how it will help your small business. Grab your favorite beverage and a notepad and pen and get ready to spend the next 30 minutes getting expert advice on how to work deductions to your benefit. Have a specific questions or don’t have time to watch the entire episode? Check out the show notes (with watch times) below.
What qualifies a deduction?
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Ordinary – an expense that is common and accepted in your trade or industry.
Necessary – an expense that is helpful and appropriate in your business.
Basis for Deductibility
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- Cash – when you actually purchase, that is the day when something becomes deductible (this the default and the most beneficial for the small business to use)
- Accrual – when you receive the expense, that’s the day that the expense becomes deductible
- Hybrid – a mix between cash and accrual
What Will I Save?
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Tax Savings Formula
Deduction x Tax Rate = Tax Savings
Examples of What You Can Deduct
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Vehicles (for business use)
Phone
Equipment (Tools, Camera, Computer, etc.)
Supplies (Office, Cleaning, Hardware, etc.)
Contract Labor
Business Meals
Travel
Insurance
Website and Software
Taxes
Marketing and Advertising
Insurance