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‭(Hidden)‬ Catalog-Item Reuse

Tax Season: 5 Deductions to Help You Save Money

Did you know you can save up to $2,000 in taxes by using certain deductions? Here are five that could significantly ease your tax burden.
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Tax season can be a stressful time of year for anyone, but especially business owners. For starters, there’s a ton of paperwork to organize, and on top of that, you may owe a pretty penny to the Internal Revenue Service.

Good news: Did you know you can save up to $2,000 in taxes by using certain deductions? Here are five that could significantly ease your tax burden.

1) Home office. If you run your business primarily from your home, you may be eligible to take the home office deduction. The IRS allows you to deduct the portion of your home expenses related to your business. Just make sure you keep these caveats in mind: Your home office must be used exclusively for business. This means your couch, exercise room and kitchen table don't count. Your home office needs to be a fully dedicated work space that you regularly use for management and administrative functions.

If you choose to take the home office deduction, you can do so in one of two ways: simplified or regular. If you opt for the simplified method, you can deduct $5 per square foot of your home used for business purposes, up to 300 square feet. If you choose the regular method, you must track all your home office expenses, including utilities, rent, real estate taxes, repairs and so on, then deduct the portion of these expenses that pertain to your home office.

2) Education and training. If you take classes, seminars or training courses to further your professional education, you can likely deduct your tuition, related course materials and certain travel costs. Just note that the training and education in question cannot qualify you for a different trade or business, and they cannot be for the purpose of meeting minimum educational requirements. According to the IRS, the training must maintain or improve the skills required in your field.

3) Marketing and lead generation. The IRS allows you to deduct reasonable advertising expenses that are directly related to your business activities. This deduction is pretty broad and can include a variety of expenses. For example, you may deduct marketing costs from business cards, social media marketing campaigns, websites, mailing lists, newspaper advertising, flyers, postcards and other promotional materials.

4) Business mileage. If you use a vehicle for your business, you may be eligible to deduct related vehicle expenses. This year, you can deduct $0.535 for each business mile driven. The standard mileage deduction is available for self-employed taxpayers for any miles driven outside a ‘normal’ commute, so visiting clients rather than traveling to an office location would count. If you want to take advantage of this deduction, track your miles so you can supply proof in case the IRS requests it.

5) Meals and entertainment. As a business owner, if you entertain your customers, clients or employees, the cost of your meals may be deductible as a business expense—as long as the meal directly relates to your business. Generally, the deduction for business meals is limited to 50% of total costs, though there are certain circumstances where your meals could be 100% deductible.

Aaron Lesher is part of the customer success and growth team at Hurdlr. Before joining Hurdlr, he audited Fortune 500 companies at a Big Four accounting firm and earned his master’s degree in accounting from Tulane University.

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Tuesday, June 2, 2020
Agency Operations & Best Practices