Commonly Missed Tax Deductions for Business Owners
On today’s new episode of the Wiser Roundtable Podcast, Jordan Sute, CPA joins Casey to discuss how business owners can utilize tax deductions. This past year, small business owners have proved to be resilient and creative in the midst of the pandemic. Casey has found that business owners are always very good at their business, but not as good at taking care of themselves. Jordan has seen so many clients that are so good at what they do, but when it comes to the books they have a harder time keeping them clean.
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SUMMARY:
Small Business Owners
First of all, you need to have a system in place to catch all your deductions. You have to separate pools of money to separate business and personal expenses. Otherwise, you will not be able to catch it all. It also causes a legal issue if you keep everything in one account, because it makes it harder to defend your business as a separate entity from you personally.
Car Expenses and Home Office Deductions
Almost everyone drives for their job at some point, so keep a log of your car expenses. You can also take a home office deduction with a designated space in your home. Cell phone and internet expenses can be at least partially expensed for business use. There is also a depreciation deduction for the car that can be taken as well.
Petty Cash Expenses
Anytime you accept petty cash, you should be keeping your receipts. Although it’s small, it is still a deduction that you could miss. This also goes with checks. Write in the memo what it is for so that at tax-time, you can see exactly what the check was for.
Accounting and Legal Fees
If your CPA is doing your business and personal returns, make sure you take note of the business portion of the fee because that can be deducted. Even meeting with a financial advisor to meet about your business, that fee is eligible to be deducted.
R&D Tax Credit
You can take this credit in a pass-through or on a C Corp return. If you and your business are working on developing or researching new ideas, call up your CPA and have them see if it can be deducted. There are teams out there that work all year long on this one tax credit.
Book Recommendations
The book E-Myth Revisited by Michael Gerber, helped Casey figure out how to delegate and structure Wiser Wealth Management. The other books Casey recommends for business owners are Building a Story Brand and Marketing Made Simple by Donald Miller. All three of these books have helped Wiser grow internally and externally. It takes a lot of time to create the story brand process, but it is totally worth it.
TIMESTAMPS:
6:52 Small Business Owners
9:40 Car Expenses and Home Office Deductions
14:14 Petty Cash Expenses
15:51 Accounting and Legal Fees
17:17 R&D Tax Credit
29:36 Book Recommendations
LINKS:
Learn more about Casey Smith and connect with him on Twitter.
Learn more about Brad Lyons.
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Learn more about the Wiser Wealth Management Roundtable podcast and access previous episodes.