Self-Employed Tax Deductions

Sales professionals are rebels, we like doing things our way and be in control of how much money we make. Not alot of people can handle that, especially when it comes the added responsibilities that come along with being self employed. I’m assuming you are reading this because you are self employed, you could be in sales or other occupation, regardless, these tips can help you figure out some really brilliant sales deductions you probably haven’t thought of yet.

Being successful in business requires the savvy knowledge of the tax code and how general finances work, read these tips carefully and think of how they can be applied into your current business expenses:

Your vehicle: Driving a car isn’t cheap, especially when you have to drive from meeting to meeting on a daily basis. This tax deduction is very simply explained, let’s assume you own two vehicles. One is used solely for the purpose of delivering client orders which means 100% of the miles and expenses are used for business, which translates to a 100% deduction on all the expenses. The second vehicle was driven 20,000, 5,000 of those miles were driven to client meetings, which means 25% of all expenses in the second vehicle are tax deductible. If you think about it, you could be saving some serious cash with these deductions!

Working at home: The IRS has become more open to work at home business deductions, you are allowed to deduct any expenses that are related to your business as long as there is a determined area being used regularly for business operations. You can also deduct the miles you drive from home to other business spaces or client meetings, as long as they are business related.

Party anyone? Yup, if you hold an open party or event for promotion of your new product or service, you’re allowed to deduct the entire cost of the event (liquor and food, too). But if you decide to make it an invitation only event, you are only allowed to deduct 50% of the total amount spent. Still, that’s one nobody has ever told you about!

Breakfast, lunch, and dinner! Whenever you pay for the bill at a restaurant or outing, you are required to prove it was business related. A great way to do so is make a copy of the receipt and attach any business cards of the people you had a meal or drink with, it’ll cut down on the amount of time you spend documenting every deduction.

Clean up! You were drinking a delicious cup or red wine and you got some on that fancy suit, the only way to get it out is to pay for those expensive dry cleaners. No problem! As long as the outing was business related, like a conference, you can deduct the money you spent to clean the suit. Just make sure you don’t try to deduct three months’ worth of dirty suits when you come back from a five day business conference.

Put them to work! If you dream of having your child take over your business one day? As long as you give them a real job and are willing to fill out the extra paperwork required for payroll and file it, you can get a break from whatever you pay them because they are taxed much less than a person over 18.

Hire him, too! Yeah you can also hire a spouse and deduct any medical and insurance plans you set up as an employer. You can include your hole family and yourself!

Don’t cheat! Just remember the most important thing about being in business for yourself is the honesty, it has to be on high at all times. And you can sleep well at night knowing you have nothing to hide.

Find a tax expert on this matter if you need advice on creative tax deductions, read a few books and make sure you are taking advantage of all the opportunities to save that hard earned money into a high yield savings account. Sell sell sell!