Tax Tips: Top Eleven Deductions You May Be Missing

It’s estimated that small business owners and the self employed overpay their taxes by nearly $160 billion every year. Check out these helpful tips to make sure you’re not adding to that sum.


1. Inventory Write-Offs: Depending on your carryover, now is a good time to go over the gear in your stock room and check for obsolete and damaged product. The drop in market value can be written off as a deduction.

2. Give it away: Another option for getting rid of back stock and reducing your tax burden is to give it away to a charity of your choice. Not only will this free up some of your stockroom, but also get you a solid deduction and generate a marketing opportunity. This is especially handy for C corps.

3. Vehicle Deductions: Be sure and keep track of your mileage throughout the year. Every trip you make for business can be written off at 50.5 cents for the first six months of 2008 and 58.5 cents for the second half of the year.
4. Advertising Deductions: Advertising and promotions directly related to your business are deductible as miscellaneous expenses. See IRS Publication 535 for more information.
5. Legal and Professional Fees: Perhaps the biggest thing you can do to maximize your deductions is go over your books and filings with a professional accountant. Once you do that, be sure and write off all fees they charged you.
6. Health Insurance: If you’re self employed you can deduct 100 percent of your premiums as long as they don’t exceed your profits. Beware though, you can’t take this one if you’re eligible for your spouse’s work insurance.
7. Cell phones: Get your cell phone in your business’ name and this expense can be deducted relative to the amount of personal time your use it for.
8. Equipment: All of your office supplies, computers, software, furniture, anything you use for your office or shop is a write off. Keep great notes – you’ll thank yourself when you get the write off and a smaller bill from your accountant.
9. New Depreciation Breaks: For 2008, the IRS has changed the law to allow small businesses to depreciate 50 percent of the value of purchases in the first year, instead of the typical 20. This can be applied to most all equipment including vehicles and computers.
10. Meetings and Lodging are 100% Deductible: Unlike entertainment and employee meals (which can only be deducted at 50 percent) classifying rooms for business trips and food with employees correctly can save you a lot of money.
11. Work Opportunity Tax Credit: Custom made for retailers and small businesses, this allows you a write off your employees meet certain criteria such as being veterans or felons. Make sure your accountant knows all your employees’ bios.

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