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The greater the amount of money you deduct, the more money remains in your firm (or pocket). Not everything you spend money on for your company is tax deductible. The following are some popular, but underutilised company deductions that you may exploit!

5 Money-Saving Deductions Your Company

1. The rental of a property

You may deduct the whole amount of your office space rental from your taxes.

The caveat is that it needs to be owned by someone else. For example, if you are starting a new company and paying $500 a month for office space, you may deduct that amount from your taxable income to reduce your tax liability and save money.

Schedule C or the Profit or Loss from Business form are the best places to record your rental income. People who work from home may deduct the amount of their mortgage or rent they pay depending on the proportion of their house that is dedicated to their company. Using the above example, if your home office occupies 20% of your total square footage, 20% of your rent or mortgage payment is tax deductible.

Note: If the Internal Revenue Service comes to inspect your home office, make sure you are not conveying any contradictory signals about what you are using it for. TVs, sofas, and culinary equipment, for example, are excellent methods to demonstrate that you are not only utilising the area for business purposes alone! Specifically, the facility must be used for “regular and exclusive usage” and must “serve as the primary place of business,” according to IRS guidelines.

2. Office Supplies and Equipment

What you need to operate your company might also help you save money in the long term.

Furniture, computers, printers, fax machines, and other office equipment are all eligible for a tax deduction of up to 100 percent (pens, paper, etc). Books, CDs, and films on business topics are examples of items that are often ignored as tax deductions. Sales strategy, taxation, and legal literature are just a few of the topics covered, but there are many more.

3. Promotional materials

We appreciate advertising for a variety of reasons, not just because of Mad Men.

Any advertising in magazines or newspapers, as well as any promotions conducted on the internet, may be deducted from your taxable income. If you send out direct mail as part of your advertising budget, you may wish to include your printing and postage charges under Schedule C on your tax return.

4. Consultancy and Professional Services

Fees for legal representation, tax/accounting services, and consultants may all be deducted from your income in the year in which they were expended. The hitch is that if the value of the service plainly extends beyond that calendar year, it must be deducted throughout the course of the benefit’s duration rather than immediately.

5.Which of the following items is not deductible?

Yes, some of them have been tried in the past:

Think about getting a toupee instead of spending money on hair transplants or haircuts. (Lower cost, but still not tax deductible.)

Covering up for wrongdoing. Even if having a few girlfriends on the side might be pricey, hiding it behind your company will not fly!

Getting Stiffed: If you perform a service and your customer does not pay the bill, you will not be reimbursed for your expenses. This is not the case if you sell a tangible product, in which case you may deduct your cost of goods sold.