What are tax credits and deductions?

Tax credits and deductions can be complicated to work through, and without the services of an expert advisor, many small business owners simply miss out on reducing their tax liability as a result.

Tax Deductions

Here are a few common deductions many businesses qualify for:

• Home office – if you do most of your work on your business from a dedicated space in your home this could be considered a home office and could be tax deductible.
• Internet and phone – if you use your phone entirely or partially for business use, you phone costs may be partly/wholly deductible.  The same goes for the internet.
• Shipping – if you make and sent physical products, then the products are deductible, including the postage and packing.
• Insurance – premium costs can be deducted if you have insurance for business purposes.
• Business travel and meals out – if you travel away from your usual place of work for business purposes, then these costs can be deducted. These might include transport, accommodation, laundry services or tips. Mileage, if kept track of, can also be deducted. While meals are usually deductible at 50%, the IRS has made a temporary change so that the cost of restaurant meals from Jan 1, 2022 – December 31, 2022, are 100% deductible.
• Professional fees – If you engaged a legal professional, accountant or bookkeeper to help you run your business then the fees are all deductible business expenses.

Tax Credits

Here are some examples of tax credits you may be entitled to:

• Small Business Health Care Tax Credit
• Work Opportunity Tax Credit
• Disabled Access Credit
• Employee Retention Credit

How we can help

TaxAssist Advisors understands the needs of small businesses, focusing on solving the problems you really care about:

1. How to pay less tax, and
2. What numbers you need to grow your business profitably.

We can ensure your tax return is filed on time, making use of all the tax credits and deductions that you are entitled to.

Inquire online here to book your free, no obligation consultation.

Date published May 27, 2022 | Last updated Jul 22, 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.