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Where Do Taxes Come From

In case you’re similar to most entrepreneurs, you’re continually searching for ways to decrease your tax liability. One approach to do this is to exploit as many business tax deductions as you can. The rundown of these deductions is extensive, and knowing which things are on that rundown is the acceptable groundwork for meeting with your tax preparer (and we encourage you to utilize one) at tax time. 

In this way, prior to talking with your Bentleigh Accountants & Tax Advisors about the tax rates, you ought to likewise know the tax deductions that you meet all requirements for as demonstrated below: 

Home Office 

Have you turned an extra room in your home or loft into a home office space? Good news! That implies you’ll most likely have the option to deduct costs for the business utilization of your home, which incorporates mortgage interest, insurance, utilities, repairs, and depreciation. The simplified form of this deduction permits entrepreneurs to deduct $5 for each square foot of your home office, up to a limit of 300 square feet. 

Be that as it may, it’s essential to remember the government possibly permits you to claim this deduction if your home office is utilized solely for business purposes consistently. On the off chance that your home office serves as a visitor space for your mother when she’s visiting the area, that won’t fly. 

Work-Related Travel Expenses 

All costs identified with business travel can be written off at tax time, including airfare, hotels, rental vehicle costs, tips, dry cleaning, dinners, and then some. You can reference your government’s site for a full rundown of deductible business travel costs. To qualify as work-related travel, your journey must meet the accompanying conditions: 

  • The trip must be important to your business. 
  • The outing must remove you from your tax home, for example, the city or region where your organization directs its business. 
  • You should travel away from your tax home for longer than a typical workday and it must expect you to rest or sleep on route. 

Internet and Phone Bills 

Whether or not you claim the home office deduction, you can deduct your business telephone, fax, and internet costs. The key is to deduct just the costs straightforwardly identified with your business. In the event that you have only one telephone, you shouldn’t deduct your whole month to month bill, which incorporates both individual and business use. You should just deduct costs that explicitly identify with your business.

On the off chance that you have a second telephone line that you use solely for business, however, you can deduct 100% of that cost. By a similar token, you would just deduct your month to month internet costs with respect to the amount of your time online is identified with business—maybe 25% to half. 

Advertising And Marketing 

There’s uplifting news with regard to marketing and advertising costs. Not exclusively are these costs 100% deductible, but the rundown of admissible deductions is long. 

That rundown incorporates (however isn’t restricted to) the expense of a business logo design, printing (e.g., business cards or pamphlets), on the web and print advertisement space, web design/creation, social media marketing efforts, event sponsorship and promotional mailings for existing and potential clients. 

However, you can’t deduct any expenditures you incurred to support a political campaign or function in your business’ name. 

Most independent venture tax deductions are more complex than this short review portrays—we are discussing the tax code, all things considered—however, now you have a decent prologue to the fundamentals.

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November 2021