It’s everybody’s favorite time of the year again: tax season. What should be straightforward for professional planners and their businesses can quickly turn into a nightmare, with questions ranging from “Can I write off my home office?” to “What percentage can I deduct when taking clients out?” While it may appear tricky to navigate, we consulted with the experts at TurboTax and compiled a list of nine tips to get you started on the right path. Keep in mind that these are general guidelines, and you should consult with a professional about your specific situation.
1. Don’t be afraid to write off your home office. As long as you’re not trying to write off your bedroom, you have every right to claim your space.
2. Keep up to date with your technology. Printers, work computers (for business use) and other technologies are tax-deductible under a provision of the federal tax law, Section 179, which files tangible personal property as equipment.
3. Supplies can be deducted, no matter how small. It might be hard to keep track of how many pens you’ve bought, but it’s worth it when you’re able to estimate how much you spent, so save those receipts.
4. Factor in the miles. How many miles did you drive for your business? Do the math and deduct whatever percentage of miles you’ve driven for work. For example, if you’ve driven 10,000 miles, and 3,000 were for work, you can deduct 30 percent.
5. Educational sessions can be deducted. Did you take a class to better your business skills or maintain a certification? Those can be deducted.
6. Write off airfare, hotel fees and car rentals. Just make sure you’re not writing off any personal time—small breaks between meetings are fine, but not extended periods.
7. Cash in on client meals. Go on, take a client of lunch or dinner—it’s 50 percent deductible. Make sure you document the reason for the meeting on the receipt.
8. Give back with stocks. While many people give monetary donations for write-offs, you can donate stocks instead. You can even deduct the current share price, rather than your purchase price.
9. Hire independent contractors. You won’t have to pay benefits or payroll taxes as long as they meet the legal requirements. Just make sure you have them complete a W9 form.
If you have complicated deductions, particularly if you have lived in multiple states, it’s best to consult with an expert. An accountant with experience working with small business owners can ask questions to try to capture all possible deductions.
