To really take advantage of tax savings, small business owners in New York must take the right steps to ensure they are making the most of all potential deductions. These deductions can really add up at tax time, thereby freeing up some much-needed funding for essential business costs.
As illustrated by Entrepreneur, many business owners neglect important small business tax deductions. For instance, if you regularly reimburse employee expenses related to travel, you may be able to deduct these costs. In this case, keeping thorough records is crucial in the event you are asked to substantiate a deduction down the line. Reimbursements typically include travel accommodations and meals, as well as fuel money and fees for handling baggage.
If you work from home, you might also be subject to far greater tax savings provided you’re willing to put forth a little extra effort. A home office must be a well-established area that is used solely for business purposes. If this is true, forgo the simplified method of home office deduction (which affords $5 per every square foot of office space). Instead, take measurements of your office’s square footage, and divide that number by the square footage of your entire home. Next, factor in things like utility costs and mortgage payments. You are bound to garner far more in deductions using this method over the simplified one.
When it comes to lunches and dinners involving business associates, you may be hesitant to write off these instances in case they don’t meet the criteria. First and foremost, saving receipts from such outings is vital in case you are able to use them as a deduction. In terms of whether a particular session fits the bill, consider if it enhanced your business in some verifiable way (such as by resulting in a business referral). If so, it can probably be used as a deduction.