by As self-employed business owners, you must surely have a lot in your mind already. And taxes tend to go amiss among all the fires you are already putting out daily. However, every tax season, you should consciously set time aside to file your personal income taxes. As a self-employed business person, you are eligible for a host of tax breaks that can bring down your IRS bill by a substantial amount.
So, here is a list of the tax deductions you need to keep in mind as a self-employed business owner. Apply them right and keep a larger portion of your income to yourself, build your savings or business funds, or even buy a new used car in Greenville.
1. Qualified Business Income Deduction
Yes! If the venture you run qualifies as a business eligible for the Qualified Business Income Deduction mentioned in the 2017 Tax Cuts and Jobs Act, you can deduct almost 20% of your net business income from the taxable income you have to report. File jointly as a married couple and you will be eligible to claim this deduction with a taxable income of up to $329,800. The Qualified Business Income Deduction is naturally one of the first tax breaks you should claim if your business is eligible.
2. Home Office Deduction
The Home Office Tax Deduction is only available for self-employed taxpayers and you can add this deduction to save a lot on your tax bill – at times enough to pay a down in Family Auto of Taylors to finance one of our quality used cars for sale in Greenville, SC. To claim the home office deduction, you must have a dedicated space in your home that you regularly use as an office. If so, you can claim a tax break on your utilities, mortgage, and insurance expenses that are directly related to your home.
3. Retirement Savings Deductions
Not many self-employed business people contribute to an IRA or 401(k) account. And even if they do, they miss out on claiming the retirement savings tax deductions that they are eligible for from the IRS. You, being self-employed, can claim up to $6,000 as tax deductions for contributing to a SEP IRA or solo 401(k) account if you are 50 years old or younger. Over that, you can deduct up to $7,000. The Retirement Savings Deduction is an excellent way to build your future savings without paying a dime in taxes for the same.
4. Start-up costs deductions
The IRS has a tax deduction for you if you just started your business in the past tax year and recently became self-employed. Every business has a few start-up costs like market research attorney expenses, infrastructural costs, and so on. If the next expenses were less than $50,000, you can claim 10% or up to $5,000 as a startup costs deduction from your taxable income. The tax break helps you keep a greater part of your initial income within your business and use it wisely to grow the venture.
5. Phone, internet, and business meals deductions
You can even deduct a portion of your phone and internet bills from your taxable income if you can prove that you have used those services for business purposes only. In case you use your home internet for both your business and personal use, then you can claim only 50% of your net internet bill in the deduction. Additionally, the IRS allows you to claim an exemption on your business meal expenses. In most cases, you can deduct 100% of the business meal expense from your taxable income.
All these deductions can add up to ultimately help you save thousands of dollars as a self-employed business owner. And if one of your financial goals is to buy a used car, you should definitely consider Family Auto buy here pay here dealership in Greenville.
Along with low down payment offers and a variety of used cars for sale in Greenville to select from, Family Auto also gives you easy bad credit financing irrespective of your credit score. You get the flexibility to choose your monthly credit payment date and can trade in your old car at exciting rates. Family Auto gives you the total used car buying and financing package. Plan your taxes right and visit us this tax season.