Being an entrepreneur or a business owner requires knowing everything about your company, inside and out. So when the topic of taxes crops up, can you honestly say that you know everything about how to save on them? The whole tax return process can be a very daunting one to say the least, but small businesses need to keep a close eye on what they can deduct and what benefits are available to them so they can reduce what they are liable for. We are all looking for ways to save money, and when you are starting a small business, saving money is the name of the game! So use some of these methods to help make your business as cost-effective and tax-deductible as you can.
Use the Cost of the Startup as A Deduction
The IRS provides tax breaks for small businesses. You can deduct up to $5000 of your startup costs during the first year of trading. As a result, you can reduce your taxable income, which includes income tax and self-employment tax, which covers Medicare tax and Social Security. Other costs that you can deduct include the purchasing of supplies and equipment, and other operational fees. The remainder of the startup costs should then be depreciated over the course of 15 years.