Little Known Tax Deductions That Can Save You Big
by Diane Hughes (c) 2002
When you say "end of the year," most small business owners think
of two things immediately. The *second* is the holidays. The
*first* is taxes! While almost all of us pay taxes quarterly, we
still have to file in January. That means November and December
are spent getting ready. When you're gathering all your
information together for your accountant, don't forget about
these regularly overlooked deductions.
Sure, most of us already know that we can deduct a mileage
allowance from our taxes. However, many of us (especially dot
coms who don't travel much) don't bother to keep track of our
travels thinking it won't be worth the trouble. Oh, but it is!
I had the same mind-set, but - at the urging of my accountant -
decided to keep track and see for myself. I'll never neglect to
do it again! Even though almost every place that I travel is
nearby, when I added up all the 10-mile trips to the office
supply store, the bank, etc., it turned out to be a hefty total.
Haven't kept track this year? Start now.
Go back and look for deposits in your check register. This would
have meant you traveled to the bank on that date... write it
Do you have receipts from the office supply store? You must have
traveled on that day, too. Write that down. Keep all your
information on a log sheet with the date, number of miles
traveled round trip, and the purpose of the drive (i.e., office
supply store, bank deposit, etc.). You'll be pleased to find
that even short, weekly trips all throughout the year can add up
to 800 - 1,000 miles or more. Multiply that times the 2002
allowance of 36.5 cents per mile and you get a $292 - $365 tax
Did you sell products or services to someone who did not pay you?
Have you tried to collect the money without success? You can
write those losses off and get a deduction for them. No, it
won't equal the total amount of the money you lost, but it is
better than nothing.
Simply gather the information about the sale, the invoice you
submitted to the customer, and documentation of your attempts to
collect the amount owed. You do not have to file bad debt
deductions in the same year they occurred, so if you have old
losses, gather the information now so you can include it on your
Almost any trip can become a business trip if you plan it right.
Even if you're traveling to your 20-year high school reunion, you
can write off your travel expenses IF you play your cards right.
While mingling with your old chums, collect some business cards,
and hand out a few of your own. Ask people what they do for a
living (in tax talk that relates to "market research"), and set
up a phone call or two for when you return home.
I know one woman who took a pleasure trip to England. However,
while she was there, she took tons of pictures of museums,
landscapes, etc. She gathered brochures and picked up some
information from a few local vendors. She used these things to
justify her trip as business travel for her set design (theater)
No, you don't have to spend the entire trip talking/doing
business. Just be able to document that you did some business
while you were there. You can also take deductions for lodging
and meals while you're on your trip so save your receipts!
As you can see, there are many tax deductions available to you.
To find out about more, set up a "pre-tax" appointment with your
accountant or tax pro. They can give you information on
additional tax deductions that might apply to your particular
industry. When you add up all the small stuff, you can end up
with some major tax savings!
Diane Hughes is an accomplished Internet entrepreneur and editor
of the popular ProBizTips Newsletter. Subscribe to her newsletter
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