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Some – 8 | Often Forgotten Small Business Tax Write-Offs
It is said that when you are a non-finance person, the only bookkeeping / record keeping that you recognize is only capturing the income
It is a common perception that bookkeeping primarily involves tracking income, but in reality, it encompasses a comprehensive range of financial activities essential for a complete and accurate picture of a business’s financial health.
Dealing with taxes and the legal aspect of running a small business can be a nightmare.
As an entrepreneur or small business, you know that taxes can be pretty harsh. Make sure you’re taking advantage of everything you’re able to.
8 Often Forgotten Small Business or Entrepreneur Tax Write-Offs:
1 | Plants Hire
In accounting, “plant hire” refers to the rental of machinery and equipment for a specific period, treating the hire cost as an operating expense rather than a capital investment. This is common in industries like construction and agriculture, where businesses pay a fee to use equipment for projects without the large upfront cost of buying it. The accounting treatment depends on whether your company is the hirer or the provider of the equipment.
2 | GIFTS TO CLIENTS I know a lot of businesses in their nature they use the business funds to purchase gifts as a token of appreciation for long-term / returning clients. Just to thank them for the continuous supports. This is also a marketing technique. It could be welcome bags or thank you bags with goodies, so this would be a perfect example. A marketing tool because when clients feel appreciated they stay with the business, they go as far as recommending your services or products to their associates / network. With that said – the customer service must be equally be good. Freebies should not be a substitute or compromising the quality of the service rendered.
3 | SOFTWARE
Most small business owners know to deduct their expenses for accountants and legal advice, but sometimes it can be easy to forget the smaller software necessary to run your business. This could be anything such as invoicing software, anti-virus software or Evernote.
4 | INSURANCE PREMIUMS
There are many different insurance premiums that might affect your business. If you work from home, you can also include your home owners insurance or renters insurance.
Don’t forget to deduct your own medical premiums, as well.
5 | RESEARCH/ TRAINING TRIPS
Writing off travel for business can be tricky, but there are times when you should. If your trip was related to furthering your business, even if it’s writing an ebook, you may be able to deduct it.
You may still be able to deduct certain parts of your trip, like 50% of a client/prospect meal and travel to see a particular client.
6 | TOOLS OF THE TRADE
Some tools of the trade are easy to identify, like a new laptop.
But say you’re a food blogger who makes money from developing recipes and posting them online or compiling them into an ebook. In that case, you should consider deducting props, cook books, utensils, and potentially even the food.
Speak with your accountant on the exact rules that would apply to your situation.
7 | REPAIRS AND Renovations / Maintenance
If you work out of a home office, you may be able to deduct a percentage of the cost for the repair or renovation, even if it wasn’t directly related to your office. Speak to your accountant to make sure you follow IRS guidelines.
8 | PROCESSING FEES
Don’t forget to deduct all those fees incurred from Paypal! Did you know you can also deduct the interest accrued if you use a credit card specifically for your business purchases? Or the fees associated with having a business checking account? Pay gates, etc.
If you’ve already done your taxes for the year, I recommend pinning this infographic for next year.
In summary, it’s important to track every little thing associated with your business throughout the year, even if you’re not sure you’ll be able to write it off.
What was/is the most confusing tax write-off question you’ve dealt with since starting your business?
It’s easy to book a consultation with us. You can take advantage of our free 15 minutes virtual consultation
Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd – Registered Accountant and Certified Tax Practitioner.
Matsobanemetja Business Consulting (Pty) Ltd is your accounting partner that you can entrust with the bookkeping function, right up to financial reporting. We helps you keep accurate records of your business finances.
We have well trained and qualified staff that manages the aspect of both business and individual taxes.
We are the fast growing accounting service-providing agency in South Africa and across the globe.
If you need a consultation with us with regards to your business, any type of business – please reach out to us by email hello@matsobanemetja.blog
Matsobanemetja Business Consulting (Pty) Ltd offers a wide range of bookkeeping and accounting services, tailored to your business needs at an affordable price.
You may please inquire with us by sending an email to enquiries@matsobanemetja.co.za
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