Every year, business owners face their toughest and the most dreaded time – paying taxes. Though the business performs exceptionally well during the year, the amount payable as taxes is still a lump sum. But, there’s good news! There are lots of ways business owners can reduce the tax amount payable every year. One most popular and common method is tax deductions. Not many business owners are aware of this “nifty but priceless” method to lower their tax amount.
Here are the 5 most commonly overlooked business tax deductions by business owners. It’s highly advisable that you get in touch with your tax planning expert or look out for the best accountants in Ireland.
1. Travel Expenses
Travelling is a part of the job for business owners. Do you use your car for business trips or your daily office commute? Expenses such as parking and toll charges, vehicle insurance fees, fuel, vehicle breakdown and repair charges, maintenance charges will be eligible for tax deductions. Additionally, if your travel involves a flight/train/bus journey, a hotel stay, all these expenses can be accounted for tax deductions.
2. Accounting, Consultancy, Bank Expenses
Any fees that you pay related to your business such as amount paid to your accountant for preparing your tax returns, or business consultants are eligible for tax deductions. Even bank fees and finance payments such as credit card payments specific to your business will qualify for deductions. Interest charged on business loans can also be claimed as tax deductions. If you paid for the cost of education and/or training of your employees, the cost can be claimed as a deduction.
3. Advertising Costs
Any business will require paid advertising efforts. For example, printing brochures and flyers, or online advertising as a part of your marketing campaigns. This is very crucial for the success of the business. These advertising costs can be tax deductible. It’s however recommended that you speak with your accountant to validate the expenses before paying your taxes.
4. Personal and Home Office Expenses
As a business owner, you may be using a lot of your personal things for the business. For example, mobile phones, computers, stationery items, and more. You can add up these expenses and get them deducted when paying your taxes. Though not as significant as other costs, you can still save a few thousand dollars.
If you have a dedicated office premise, you can claim the rent paid, electricity and other associated costs as expenses. If you are using a room in your house as office space to conduct your business, you can claim the expenses under the Home Office deduction category.
5. Medical and Insurance Expenses
Business owners have the liberty to deduct 100% of the medical expenses and insurance costs when paying their taxes (not the business tax, but personal tax). You can also claim the expenses of your spouses or your dependents.
As a business owner, you make money; and it’s important at the same time to pay your taxes. Your business might not be eligible for all the deductions listed, or there might be some restrictions. Get in touch with the best accountants in Ireland and plan your taxes in advance.