This Year's Tax Tips for
Small Business Owners
Article by Dell Small Business
(BPT) - When you completed last year's small business tax return, did you run into surprises? Deductions you could no longer take? Changes in the tax code that left you regretting choices you made last year? You may have discovered you can no longer deduct for entertaining, so hold off on buying sports tickets for clients or potential investors. And unless you made big investments in your small business last year, you may not know that the cap on what you can invest in new equipment for your business doubled.
While it's best to consult a tax professional to avoid errors and maximize your situation, here are some tips to make sure you know what's coming for your 2019 taxes - and can take advantage of changes in the tax code.
Mileage expenses
You can still deduct car expenses for business purposes, even if you also drive your vehicle for personal use. Keep track of the mileage you rack up specifically for business travel or errands to be accurate in your deductions. Standard mileage rates increased to 58 cents per mile for 2019.
Count that home office
For a home office deduction, you must use that room (or garage) for business purposes only. It must be where you conduct most of your business or meet with clients, and you have no other fixed location to conduct much of your business. You may deduct expenses for your home office including a percentage of mortgage interest, homeowners insurance, utilities, repairs and depreciation. If you rent your home and use part of it exclusively for your business, you may be able to deduct the rent paid for that part of the home. If you rent a workspace outside your home, you can deduct that rental cost as a business expense.
Equipment purchases
Equipment for your business costing up to a million dollars can now be deducted, as explained in Section 179 of the tax code, as opposed to the previous