Last week we kicked off the month by giving you the information you need to decide which entity is best for you. This week, we want to talk about something that you might find to be a lot more fun—tax deductions!
As a Financial Advisor, you can deduct your mileage and other auto expenses, office rental, employee wages and contract labor. But did you know there are a plethora of other things that you may be able to deduct on your taxes? Keep reading to learn about some truly surprising tax deductions.
Advertising – Any money spent on branding, business cards, signage, advertisements in newspapers or magazines, etc. are fully deductible. This even includes the little candies you give away when you buy a sponsorship table at a local networking event.
Gym memberships & Pools – The costs you incur to exercise can be deductible if your doctor approves them as necessary remedies to protect your life. Furthermore, your pool can be deductible if your doctor orders hydrotherapy for your health condition or if you use it to demonstrate or test products.
Charitable Contributions – Any out of pocket cash that you give to the Salvation Army and/or any donated merchandise, food, stocks or dividend that you give can be deducted at full value—without paying capital gains taxes.
Home Office – Even if you work from home, you may still be able to deduct the cost of your office. If you have a space completely dedicated to work, you can deduct a portion of your monthly rent or mortgage as a home office expense. Simply calculate the percentage of square footage being used for business purposes and deduct that percentage off of your rent or mortgage.
Travel – You may already know that you can deduct mileage or airplane fare for business related travel but did you know that you can also deduct all meals, parking, and tolls associated with any business-related travel? And don’t forget about in-room Wifi fees! Be sure and keep thorough records of any and all travel and hold onto those receipts!
Meals & Entertainment – Any meals or entertainment with clients or potential clients are deductible as long as the purpose for meeting is business-related. If the meal or show occurs immediately before or after a business meeting or consultation, the cost of the meal or tickets can be deducted. If you have a team and you provide meal perks to facilitate people working late, you can deduct that, too. Here’s to deducting that fancy wine and dine event you hold every quarter!
Gifts – Got a client that’s celebrating a 50th birthday or an employee that’s having a baby? You can bless them with a gift and deduct its value if it’s under $25. These deductions not only show you care, but save on your tax bill!
Social Security – If you are a sole proprietorship, the bad news is that you’re responsible for both the employee and employer’s contributions to your social security. The good news? You can deduct half the cost on your 1040.
Wages paid to your kids – For sole proprietors or partnerships where you and your spouse are the only partners, you can employ your children. Depending on how much you’re paying them, they may not need to file a tax return but you can still claim their wages as a deduction. If you’ve been looking for a way for little Johnny to learn how to earn money so he can become a fancy financial planner like you when he grows up, get him on trash and filing duty. And then, start conducting a mock investor session with him.
Donations – Partnerships, LLCs and S Corporations can pass cash donations or donations of old equipment to the owner to claim on their personal taxes. C Corporations can claim the donations on business taxes.
Education – Heading to the Financial Planner’s annual conference? Any classes, training, conferences, etc. are deductible as long as the training is directly related to your field or to the running of your business.
Business related materials – The cost of any magazine subscriptions, books, audiobooks, etc. related to your field or to running your business can be deducted. Yes, even the ones you read mostly because you think they’re interesting, but also because they help you grow your business.
Office supplies – Any supplies purchased specifically for your business are deductible. Printer ink, pens, and pencils, file folders, even tape and staples! Save receipts for everything. All those little purchases add up!
This is by no means an exhaustive list of all the potential deductions just sitting there waiting for you! In order to take full advantage of all the tax benefits to owning your own business, contact us today for a consultation. Having someone on your side who knows tax laws and regulations can make all the difference when it’s time to file.