Whether you are a new or established California business owner, being aware of the business tax deductions available to you is important. According to the IRS, business expenses are anything relating to the cost of carrying on a trade or business. To ensure that you do not deduct ineligible expenses, make sure the expenses you are planning to deduct are both ordinary and necessary. Some examples include office supplies, software, telephone charges, travel expenditures, and insurance premiums.
To help you think about the money you could be getting back on your next tax return, here’s a list of some common business tax deductions available for California business.
Salaries and Wages The pay you provide your employees is tax deductible. Additionally, sick leave time, paid time off, bonuses, educational expenses, and reimbursements for employee business expenses are also tax deductible. In some cases, you may even be able to deduct the cost of employee gifts. For example, if you give your employees laptop computers for Christmas, the cost you paid for the gifts would be deductible.
Automobile and Transportation If you use your car for business, then you are eligible for a tax deduction. Activities that constitute business use of a car include driving to different workplaces and taking business trips. The easiest way to determine your business car expenses is to simply multiply your total business miles by the current federal mileage rate.
Meals and Entertainment Have you taken a client or employee out for some entertainment lately? Do you treat your office to catered lunch each week? Did you recently throw a big office party or corporate event? If so, then you may be able to deduct up to 50% of these expenses form your business tax returns. Keep in mind that you can only deduct expenses directly related to or associated with your business.
These deductions are only some of the ways you can get money back on your business tax return. If you own or operate a business in San Diego, then visit The San Diego Tax Pro. We have over thirty years’ experience providing tax return services for business owners. Contact us online or call (888) 690-9245 to schedule an appointment with one of our professional tax preparers.
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