Before the end of the year is a great time to get ready for tax season and maximize any tax savings you get from deductions for the past year.
Some of the top tax write-offs for self-employed people and business owners, according to TurboTax, are IRAs and using part of a home for business purposes.
“Any and all equipment/supplies purchased for office or home [office]; i.e., printers, laptops, cases of paper, and ink,” top the list of Candy Morgan, RPR, a court reporter in Orlando, Fla. In addition, Morgan reminds others that the federal rate for mileage is 56 cents a mile (although confirm current rates). “We just have to keep a log with numbers from the odometer. We cannot write off driving to and from the office from home, but the trip to the office can be in the middle of the day. And, definitely, all parking and tolls,” Morgan reminds.
“The accounts receivable that I’ve struggled getting paid for over the last several months I write off as bad debt expense at the end of the year,” says Linda C. Larson, RPR, CRI, a freelancer and agency owner in Carlisle, Pa.
“Maximize your tax savings by taking advantage of purchasing new equipment. Don’t forget that machine maintenance, software upgrades, and service contracts can be considered tax breaks. In addition, in states that require licenses or certifications, those fees as well as any fees that support continuing education requirements for those licenses also can be used as a tax deduction,” reminds Phil Liberatore, owner of Philip Liberatore, CPA, a company based in La Mirada, Calif
Finally, if you have questions about what you can and cannot claim as tax breaks, be sure to contact a certified accountant or tax preparer.