What is the best tax deductions?

This is a very broad question and it depends on your business situation & entity type for US- S Corp, C Corp, partnership or sole proprietor.

If you are a C Corporation or S corporation, taxes are very complex so certainly consult a tax professional or CPA.

My response below is for a small business owner. There are so many business deductions available. I will name a few that are most commonly overlooked at the time of tax filing. Also in order to claim these expenses, you need to maintain all the records for documentation purposes :

  1. Using your home for business purposes Eg: Home office
  2. Startup costs: You can deduct up to $5,000 as start-up costs even before you start your company.
  3. Depreciation- various equipment, computer, vehicle. Again there are various other rules to keep in mind for taking this deduction.
  4. Actual / Mileage car expenses used in business - there are various other rules here to be checked to claim this deduction.
  5. Bad debts

The entire list is part of an IRS publication which has all the details Pub 334- tax guide for small businesses.

Amending a tax return to claim previously missed deductions can be a costly and time-consuming process, so you should consult a tax professional as it is their specialty. Many CPAs/ tax professionals are so familiar with the tax code, they are able to find all the missed and overlooked deductions saving a lot of $$$ for their clients.

*** Based on our response posted to question on quora

Posted In: Tax

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