How To Take Advantage of The Tax Benefits Available To You As A Business Owner
with SPECIAL GUEST - CATHERINE TINDALL • DECEMBER 13th, 2021
There are dozens of tax advantages to being a business owner. Even if your business is not a full-time gig, you can still qualify!
But to take advantage of these tax optimization tips, there are actions you will need to take each year before January 1st.
This week on The Six Figure Biz ShowI invited special guest Catherine Tindall to join us, and share with you important steps you should consider taking to reduce your tax bill in the coming year. I get asked questions about taxes by clients all the time - and I always say, "Speak to a CPA!" So this week, I did that for you ;-)
As always, let’s pull this problem apart.
How To Take Advantage of The Tax Benefits Available To You As A Business Owner - Episode 71
3 Ways To Use The Augusta Rule To Save On Taxes In Your Business - Episode 78
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Once you have a basic concept of how to take advantage of tax benefits as a business owner, the next step is having a CPA look over your accounting and tax strategy to ensure you are completely covered.
As a business owner, you can write off quite a few of your every day expenses! Here is a list of some of the most popular ones:
Work-Related Travel Expenses
If you travel for work, all expenses incurred can be written off at tax time, including airfare, hotels, rental car expenses, tips, dry cleaning, meals and more. To qualify as work-related travel, your trip needs to include the following:
The trip must be necessary to your business.
The trip must take you away from your home, i.e. the city or area in which your company conducts its business.
You must be traveling away from your home town or area for longer than a normal work day and it must require you to sleep or rest on route.
You can write off 50% of qualifying food and drink purchases. To qualify, the meal needs to be related to your business and you have to keep the following documentation related to the meal:
Date and location of the meal
Business relationship of the person or people you dined with
The total cost of the meal
Tip: The easiest way to track business meal expenses is to keep your receipt and jot down notes on the back about the details of the meal!
Use of Your Car For Business
If you use your car strictly for business-related purposes, you can write off all costs associated with operating and maintaining it.
If your car use is used for both business and personal reasons, you can only deduct costs that relate to the business usage of the vehicle.
If you work from home or use a portion of your home for your business, you might qualify for a deduction. To qualify, your work area has to be used exclusively for business (i.e. you can’t write off the square footage of your dining room if you do your work at the table during the day) and you need to use the home office regularly as your principal place for conducting business.
Education & Personnel Development
Any educational expenses you incur to bring value to your business are fully deductible for tax purposes. The requirements for education-related expenses are that the course or workshop must improve your skills or help maintain your professional expertise. Educational expenses that qualify for deductions include:
Once you have a plan for reducing your tax bill, you will need to make those savings work for you! A great way to do this is by reinvesting it wisely.
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About the Author
Sarah Nicole Nadler, host of THE SIX FIGURE BIZ, brings you her own take on business, and interviews successful $6+ figure women & experts to bring you topics like sales, marketing, profitability, hiring, team-building, company culture, and more.