Should I Itemize or Use Standard Deductions?

 

 

Today we’re talking tax deductions, what they are, what qualifies, and how it will help your small business. Grab your favorite beverage and a notepad and pen and get ready to spend the next 30 minutes getting expert advice on how to work deductions to your benefit.  Have a specific questions or don’t have time to watch the entire episode? Check out the show notes (with watch times) below.

What qualifies a deduction?

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Ordinary – an expense that is common and accepted in your trade or industry.

Necessary – an expense that is helpful and appropriate in your business.

 

Basis for Deductibility

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  • Cash – when you actually purchase, that is the day when something becomes deductible (this the default and the most beneficial for the small business to use)
  • Accrual – when you receive the expense, that’s the day that the expense becomes deductible
  • Hybrid – a mix between cash and accrual

 

What Will I Save?

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Tax Savings Formula

Deduction x Tax Rate = Tax Savings

 

Examples of What You Can Deduct

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Vehicles (for business use)

Phone

Equipment (Tools, Camera, Computer, etc.)

Supplies (Office, Cleaning, Hardware, etc.)

Contract Labor

Business Meals

Travel

Insurance

Website and Software

Taxes

Marketing and Advertising

Insurance

 

 

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