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small business tax breaks

You Still Have Plenty of Time to Plan For These Small Business Tax Breaks

We’re down to the last third of the year, but there’s plenty your small business can do with 2019’s final four months. Among them? You can position yourself to qualify for a number of small business tax breaks.

We won’t pretend that now is the ideal time to hammer down your tax strategy. Truth be told, that’s something you want to do closer to the beginning of the year. Preparing near the start of the calendar year gives you the maximum time possible to gradually become eligible for various deductions and write-offs.

But if you haven’t started already, don’t worry. For one, you can make 2020 the year that you build a comprehensive tax plan. And there’s still enough time left in the 2019 to start honing in on certain tax opportunities.

The following are a few small business tax breaks you still have time to plan for.

Top Small Business Tax Breaks to Look Out For

  • Contract Workers: This is a great one to start with because it’s something you might have already done without thinking about it. In short, if you’ve used contract labor (in other words, hired a freelance or contract worker) for a number of tasks, including office staff, consultants and seasonal workers, you can deduct the costs related to that work.
  • Rent: Another tax deduction you might already be eligible for is rent. If you work out of your home, and you have dedicated space for a home office, figure out what percentage of your home’s space that office takes up – you can likely deduct that percentage of not just your rent, but also utilities.
  • Vehicle Use: You also can deduct vehicle mileage for certain business-related uses. This doesn’t apply if your company is completely vehicle-centric (say, you own a taxi service). And you can’t go so far as claiming your daily commute. But if you or your employees make trips such as driving to meet with a customer, or even going to pick up supplies or depositing a check for your company, you can claim business miles. (Note: There are two mileage rates – standard mileage and actual expenses – so check to see which one you qualify for.)
  • Advertising Expenses: Did you plan on doing any advertising during the final few months of the year? If so, good news: Ad expenses are deductible, too. (And if not, you might want to consider that when thinking about the costs.) The IRS says “You generally can deduct reasonable advertising expenses that are directly related to your business.” (But it also specifically excludes lobbying expenses.)
  • Interest on Business Debt: At its simplest, small companies can deduct interest on loans it takes out to support the business. That said, you have to meet certain qualifications, such as proving that you’re borrowing from a professional lender – not just from a friend or family member. And what interest is deductible can vary. For instance, if you refinance, you can’t claim any of the interest paid that year on the original loan – you can only claim interest on the new loan.

Some tax breaks are straightforward, while others are a bit more complicated. But all of them require you to meet certain baseline qualifications, and many of them have exceptions and rules that, if you ignore them, could result in an incorrect claim. So before you start formulating any sort of tax strategy, get the experts involved. McManamon & Co. is an accounting, tax, fraud, forensic and consulting firm that offers innovative and, importantly, proactivetax advicethat can help you save money on your annual taxes while keeping you in good standing with the IRS.

It’s not too late to start working toward substantial 2019 tax savings. Give us a call at440.892.9088 or contact us online, and we’ll help you figure out what deductions and write-offs are still within reach.

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