Entrepreneur Millennials Top 10 Tax Deductions
It’s predicted that by 2020 entrepreneurship will account for 50% of our American workforce. While many entrepreneur millennials are educated self-employed, and small business owners, taxes still remain a grey area for many.
That’s why Aguilar Tax Services is here to help! We’ve put together a list of 10 most common tax deductions for entrepreneurs, side hustlers, freelancers, and many more.
Home Office Use
If your business is legitimately part of your home, don’t be afraid to deduct certain expenses. A percentage of your mortgage, insurance, repairs, professional cleaning, and utilities are just to name a few. To qualify, the room must be used only for business!
Telephone and Internet
Telephone and internet: Any dedicated services for your business are deductible. If you use your home or personal cell phone for business, you may only deduct the portion used for business purposes.
Education/Training
If you are continuing your education or obtaining certification for the business you are already in, you may deduct the costs on your taxes. If you are continuing your education for a new line of business, it is not deductible!
Advertising
A huge part of a growing business whether it is home-based or an office space is publicizing it. Thankfully, most advertising costs is deductible. Business cards, digital advertising costs, billboards, mailers, signs, giveaway items, website, postcards and the list can go on and on.
Vehicle Use
Most entrepreneurs use their own transportation. If your vehicle is exclusively for business, you can deduct certain expenses, like fuel and maintenance records.
Business Travel
If you travel for business only, the cost of transportation like airfare, train, bus, baggage fees, lodging, and meals is deductible subject to a certain percentage limit. The IRS is pretty strict about this rule and requires a certain form to claim any travel deductions.
Books, Legal, and Professional Fees
Your business books, including tax preparation, are fully tax deductible as a cost of doing business. Fees that you pay to lawyers, tax professionals, or consultants generally can be deducted in the year incurred. However, if the work clearly relates to future years, they must be deducted over the life of the benefit you get from the lawyer or other professional.
Charitable Contributions
If your business is set up as a partnership, a limited liability company, or an S corporation, your business can make a charitable contribution. If you own a regular (C) corporation, the corporation can deduct the charitable contributions.
If you’ve got some old computers or office furniture, giving it to a school or nonprofit organization can yield goodwill plus a tax benefit. However, if the equipment has been fully depreciated, you can’t claim a deduction.
Dues and Subscriptions
Are you a member of any organizations, networking groups, or chamber of commerce that require fees? Do you have any programs that you spend a monthly fee? These are all tax deductible!
Employee and Contract Worker Wages
Although, your income is not deductible the payroll you pay to your employees or contract labor is. If you know you will be paying a contractor more than $600 in a year, send them a 1099-MISC for and track your payments to them!
Remember: as a millennial entrepreneur, not all business expenses qualify as a tax deduction- that is why you can count on Aguilar Tax Services to help you make sure your expenses qualify and the correct amounts are deducted.
Are you ready to get started? Call or text me at (949) 394-9725.
