13 Best Tax Deductions for Small Businesses to Claim [2019]

“Which tax deductions is my business eligible for in 2019?”

If you find yourself asking this question, then you’re not alone. Claiming some of the more obvious tax deductions, like salaries and wages, is a no-brainer when you’re gearing up for the tax season. What many business owners don’t realize is that, as long as they search, they’ll find other expenses to write off, too.

Business owners are still enjoying newfound liberties from Trump’s 2018 tax code. If you’re motivated to grow your business, then take advantage of every available tax deduction opportunity in 2019.

How do Business Write Offs Work?

When tax season rolls around, your small business will be charged based on the year-end taxable income. There are many different expenses that can contribute toward decreasing the year-end taxable income, which can make a substantial difference. The lower your taxable income, the lower your year-end tax payments.

What Business Expenses Can You Write Off in 2019? Here’s Your Checklist:

Tax laws are constantly changing. Building your itemized deduction list to stay ahead in 2019 is a vital step for businesses of all sizes.

1. Tax Breaks on Starting a New Business

Congratulations! You’ve believed in yourself and your idea, focused your energy on what matters, and launched a new business. We know better than anyone that the road to success can be difficult, but take solace in the fact that you’re eligible for a business write off.

You’re eligible for up to $5,000 on a start-up tax break, which can be applied to research, organizational, and other related costs.

2. Small Business Tax Deductions on Rent and Utility Payments

Office or facility space, along with utility payments, can quickly become a burdensome expense for unsuspecting business owners. However, there’s no reason to let these expenses continue impacting your bottom line during tax season.

Your rent checks and utility payments are both fully deductible. Utility payments include not only the basics– electricity and water– but also cell phone expenses.

3. Tax Breaks on Building Repairs and Depreciation

If you own your office or building space, then you may have invested some of your cash into building improvements. Fortunately, money spent on building repairs is also deductible during that year. Expansions or additions do not qualify as deductions.

However, depreciating the value of your commercial building as time passes also works to your favor.

4. Equipment Rent as a Tax Deduction

Another simple, full deduction that many small business owners can (and should) take advantage of is equipment rent. Money paid on a monthly basis to either rent or lease equipment is one of the best tax deductions.

However, there’s no reason to settle for a tax deduction on equipment rent. Why rent equipment when you can purchase it outright? At National, we offer equipment financing programs through our global marketplace of 75+ lenders, serving business owners in every industry.

5. Company Cars: Vehicle Write Offs for 2019

Company vehicles not only make transportation a breeze, but also qualify for tax deductions. As long as you can prove that employees drive and use the vehicles, be sure to add this deduction to your list.

This includes not only the cost of the vehicle itself, but also gasoline and oil changes.

6. Writing Off Travel Expenses

If you (or your employees) travel frequently for business, then you may be eligible for several deductions.

Some of the more obvious-travel related expenses, like train, plane or bus tickets, are deductible. However, travel around the destination city or area is deductible as well. These guidelines are fully explained in IRS Publication 463.

7. Writing Off Contracted Labor

While freelance and contract labor won’t incur the same costs as hiring an employee, these costs are eligible for tax deductions. You are eligible for a business write off on any freelance or contracted laborers earning over $600 in the given year.

8. Tax Deductions on Business-Essential and Office Supplies

Any supplies related to the core function of your business are tax deductible. For many service industry businesses, this can be one of the biggest tax deductions in 2019.

For example, windshield repair companies can claim deductions for glass. Similarly, restaurants can claim deductions on raw food.

Furniture and other supplies, like paper, are also deductible.

9. Writing Off Taxes

Many of the taxes that your small business pays are deductible when the end of the year rolls around. This includes federal, state, sales, real estate, and other taxes.

10. Tax Breaks on Business Insurance Policies, Benefits & Retirement Packages

Company benefits packages keep your employees healthy and happy, which is a priority for all business owners. These policies are eligible for tax deductions, like other similar retirement and related packages.

Regardless of your industry, purchasing a business insurance policy is a strategic way to prevent one misstep from having significant side effects. These policies can be expensive, but many qualify for tax deductions as the year ends. This applies to lost revenue insurance, flood insurance, business owner’s insurance, and more. Gifts purchased for employees qualify, too!

Contact the team at National to learn more about how small business insurance services can help you earn the coverage you need.

11. Small Business Tax Deductions on Advertising & Marketing

Whether you hire a NYC advertising agency or a local digital marketing company, be sure to track these payments. All advertising expenses are deductible come the end of the year.

12. Legal and Other Professional Fees

At some point, many small business owners must hire a professional, like a lawyer or accountant. Fortunately, these retainer fees and other expenses can be written off.

13. Writing Off Bad Debt

Businesses can amass bad debt through a number of different sources. Whether this debt accumulates through employee loans or vendor payments, it is tax deductible. In order to claim this bad debt as a tax deduction, though, there must be a record that proves it is a business, not personal, expense.

Home Business Tax Write Offs

Tax deductions aren’t just for small businesses operating out of an office building. Business owners who operate primarily out of a home office can also take advantage of numerous small business write offs.

Many of the costs associated with maintaining a home office are included in the costs of maintaining a home. If you work from home, you may qualify for deductions on home-related payments like mortgage insurance, homeowner’s insurance, and utility payments. These will not, however, be full deductions. Only the portion of these payments that applies to the home office maintenance can be deductible.

Save any and all of your receipts, and apply for as many deductions as you can!

The money that your small business saves on tax deductions can be critical in growing your business. But to propel your operation to the next level, alternative financing can be your secret weapon. Call our team to discuss the options that you qualify for, or start now by filling out our 1-minute loan application!