Thursday, December 20, 2012

7 Top Tax Deductions for Small Businesses

1. Auto Expenses

As a small business owner, you are able to deduct some of your automobile expenses. You may be able to expense the cost of a vehicle if you use it for your business. You should always keep track of all your business-related automobile use. You also may be able to deduct a certain amount for mileage.  You may also deduct for tolls and parking costs.

2. Entertainment Expenses

You may deduct for entertaining clients and prospective business contacts. You may do so as long as business is discussed during the event. The most common entertainment expense occurs when taking business contacts out for meals.

3. Travel Expenses

If you travel a lot for work, you are in luck! You can deduct some of your travel expenses. These expenses include: airfare, car or taxi usage, lodging, meals, calls and faxes.

4. Charitable Donations

In some instances, depending on the type of company, you may be able to deduct for charitable donations. If your company is a Partnership, S-Corporation, or Limited Liability Company you can deduct for cash donations.

5. Advertising and Marketing Expenses

Advertising and marketing costs directly related to your business may be deductible. Some of these may include business cards, radio, television or print ads and promotional activities.

6. Software Deduction

You can deduct software purchases for your small business if you purchase and use the new software within the same year.

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