There are many individuals who can count raw material expenses in self employed tax deductions. As a business owner or self employed citizen, you are allowed a laundry list of tax deductions since certain expenses are necessary and relevant to your business. Oftentimes, many seasoned business owners neglect to maximize their chances of a sizable tax return, overlooking some qualified deductions. This is probably one of the many categories that encompass tax law. Laws are after all subject to interpretation, and you can deduct many of your expenses that directly contribute to the development of your business. The ultimate key is to document all your business expenses, and make sure you earn more than what you deduct on a yearly basis.
Using your vehicle for work errands can be recorded in the mileage deduction category. All you have to do is keep a mileage record every time you travel to work. This can be deducted directly from your taxes. If you have plans on deducting car insurance, keep a record of the total mileage you put on your car for this year. The total percentage that you use the car for work can be deducted from the insurance.
Insurance Fee Deductions
Home and car insurance can be deducted from your very own business income. This only works when you use your personal car and home for your business. Make sure you document how much you use for each. One room in your house or apartment may be your office. If this room is equivalent to 10 percent of your home's square footage, then a total of 10 percent of your very own home insurance tax can be deducted from your taxable income.
Medical Insurance Deductions
If you are an independent business contractor, health coverage can be a very costly part of your expenses. All of your health contributions are deductible, though, so you better keep this in mind when you are doing tax deductions. If you have an independent payer plan, make sure you keep track of your payments to the insurance company and turn them in as among your itemized deductions at the end of the year. You do not need to have a health savings account because all your health expenses are already paid for with the use of tax free dollars.
Loan Interest Deductions
Interest for small business loans is part of your tax deductible expense. If you currently have a small business line of credit, the interest can be deducted based on what your business earns on a yearly basis. Student loan interests can even be deducted based on your income. Ask your accountant for help on how multiple loans and debts can qualify as tax deductibles.
You may not be traveling a 100 percent for your business, but any business trip can still be tax deductible. If you meet with a client, you can legally deduct the entire trip from your taxable income. All you have to do is to document when and how you served the business while traveling, and make sure that the income always outweighs the deduction claimed.
- Home & Business Finances
- Self-Employed? Tax Deductions You Didn't Know You Could Make
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