Start planning for next year
Being an entrepreneur can be great in many ways. The ability to set your own hours or be your own boss can be heavenly for many. On the other hand, it can also be a nightmare at tax time. Rather than getting a chunk of money automatically taken out of each paycheck, many entrepreneurs have to cough up a pretty big chunk of change every tax season. On the other hand, entrepreneurs are also entitled to a number of deductions on your taxes that traditionally employed people are not. Here are 7 tax breaks you may be entitled to as an entrepreneur.
1. Home office
Even if you have an office elsewhere, if there is a space in your home that you use regularly and exclusively for business, you can claim it as a deduction.
Unlike your home office, you can still claim a portion of your phone and internet bills even if you don’t use your phone or internet exclusively for business. If you only have one cell phone, however, and use it primarily for business purposes, you still don’t want to try and claim the entire bill.
3. Health insurance premiums
If you are an entrepreneur that pays your own premiums, you can deduct them on your taxes as long as you were not eligible for a plan through a spouse’s employer. If you pay for coverage for them however, you can also deduct their premiums as well as for any children under the age of 27 – even if they are no longer dependents.
While you want to tread carefully around this one, if you conduct business while in the box seats of your favorite sports team, you may be able to claim it on your return. In addition to receipts, you will want to keep meticulous records regarding what business was conducted, when and with whom it was conducted and what the outcome of the transaction was as it relates to your business. These transactions must also occur immediately before, during or after the event as well. Even then, the expenses are only 50% deductible, so keep that in mind when shelling out the money in the first place.
When you use your own vehicle for business purposes, you can claim your mileage as a deduction. If you use your car for both business and personal purposes, however, be sure and keep careful records of the date, mileage and purpose for each trip you claim.
Meals while traveling or entertaining a client are tax-deductible, but they cannot be “lavish or extravagant under the circumstances.” Claiming a $200 meal as an expense on a trip to New York City may not raise an IRS flag the same way a $200 meal would in De Moines, IA. Keep in mind, however, that as with entertainment expenses, you can only claim 50% of the expense.
7. Business Equipment
Whether you need a new laptop, a hi-lo massage table for your practice or a massage chair for corporate events, the equipment you need to operate your business is tax deductible.
8. Work related education (CEUs)
Don’t forget that you can deduct work-related education. So all those online and in person trainings are tax deductible.
9. Licenses, Insurance & Association Fees
There’s absolutely no reason to run a legitimate practice. Many of the items required to legitimize your practice are deductible year after year.
10. Journals and Magazines
I don’t know about you but I subscribe to many different publications. Those for personal growth and those that I keep in my office for clients. These can sometimes get expensive but they are also tax deductible.
These are some pretty solid deductions massage therapists can count on year to year. They are ones you can plan for ahead of time too. Tax deductions allow small businesses to stay competitive. It’s up to small business owners to learn about them and use them to gain business acumen and success.