There are many factors that small business owners might consider when preparing for tax time. The government allows for various deductions. Some may not be widely known. A few tax tips could save business owners money in the long run.

Initial Costs

During the first year of getting a business up and running, owners may deduct up to $5,000 in expenses. The costs may include advertising, education, training or travel. If a business’ start-up costs exceed the allowable amount, the expenses may be amortized over the next 180 months of 15 years. Working with an accountant helps uncover any forgotten costs.

Outstanding Debts

Small business owners have the opportunity to deduct uncollected debts if they are related to services rendered or items purchased. But, in order to qualify for the deduction, the owner must have included the amount in the business’ gross income for the year.


Education expenses used to train the business owner or any employee are deductible when the instruction is related to the business. Classes might be needed to obtain a particular license or certificate required by the business. Perhaps classes were used to boost work-related skills. Along with training expenses, business owners may also deduct the cost of books, travel or other related materials.

Bank & Credit Card Costs

Any fees associated with banking accounts belonging to the business are deductible in the year they occurred. Credit card fees are also deductible if the card is owned by the company.

Home Office

Home office expenses are deductible. However, the business owner must have the receipts available for the expenses incurred. The office must be separate from any other area in the home. The square foot of the area is then used to deduct rent, mortgage costs and utilities. Vehicles and mileage are deductible when used primarily for the business.

Necessary Technology

Today’s businesses often use computers, fax machines and printers for company purposes. These are all deductible in the year the items were purchased. Similarly, software purchased for inventory, payroll, security or tax preparation are also deductible.

Miscellaneous Expenses

Only 50 percent of the cost of food or meals purchased for the company are deductible. The cost of entertaining clients that involve events, travel or non-food expenses is no longer deductible.

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