If you’re in the process of starting a new business, congratulations! It’s an exciting time filled with endless possibilities. However, it’s also a time that comes with a lot of paperwork—including tax forms. Filing taxes can be complicated for anyone, but if you’re a brand-new business owner, it can be especially daunting. To help you out, we’ve compiled a list of 5 often-overlooked tax deductions for brand-new businesses.
1. Start-Up Period:
The start-up period is the first year of your business’s operation. During this time, you can deduct a wide variety of expenses related to getting your business off the ground, including advertising, travel, consultants and subcontractors, product development, and business formation costs.
2. Operational Period:
Once your business is up and running, there are still plenty of deduction opportunities available. Many operational expenses—such as office supplies, utilities, rent, and payroll—are fully deductible. And don’t forget about the cost of any professional services you may use, such as accounting or legal services.
3. Bank and Loan Fees:
If you took out a loan to finance your start-up costs or day-to-day operations, the associated fees are tax deductible. This includes both the interest payments and any origination fees charged by the lender.
Any money you spend on advertising your new business is tax deductible. This includes traditional advertising methods like print ads and television commercials, as well as newer methods like Google AdWords and Facebook ads.
Travel expenses related to your business are also tax deductible. This includes transportation costs ( plane tickets, gas, etc.), lodging expenses, and even meals while you’re on business trips.
To take advantage of these deductions, be sure to keep detailed records of all your expenses throughout the year. That way, when tax season rolls around, you’ll have everything you need to maximize your deductions and minimize your tax liability.
Between marketing efforts, office costs, travel expenses, and more, starting a new business can be quite costly. However, there are plenty of deductions available to help offset those costs. Be sure to take advantage of them come tax season!