Small business owners can claim tax deductions on home office space, furniture, office equipment, software and other office supplies, reports Bankrate. They can also deduct travel-related expenses, the cost of entertaining customers, interest on business loans, advertising and legal fees, points out Nolo. Other deductible expenses are business-related insurance, salaries of employees and retirement plans, adds the Internal Revenue Service.Continue Reading
Home office deductions are based on the amount of square footage the home office takes up and are a percentage of home expenses, such as mortgage or rent, utilities and insurance, explains Bankrate. Small business owners can deduct the total cost of furniture in the year they buy it or elect to spread out the deductions over seven years. Deductible equipment includes computers, scanners, fax machines and copiers.
If small business owners use their own cars for business purposes, they can either deduct the actual expenses they incur or a standard mileage rate of 57 1/2 cents per mile as of 2015, according to Nolo. They can also deduct travel expenses, such as plane tickets, taxi fares, accommodations and meals. If the trip combines business and pleasure, travelers can deduct only a portion of expenses. Those who move for business-related reasons can deduct some of the moving costs. Business owners can deduct 50 percent of expenses while entertaining customers for business-related purposes.Learn more about Taxes