There are a number of tax breaks that are often overlooked by entrepreneurs. Among the most common missed credits:
- Health Insurance Deduction: The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.
- Travel Expenses: The standard mileage deduction is 57.5 cents per mile traveled in tax year 2015 for business purposes. You will need to document your travel and it must include at least one hour of documented business discussion. Documenting travel doesn’t have to be a hassle – there are a number of smartphone apps that can make documenting business expenses simple and will pay for themselves many times over when preparing your tax return.
- Education and Association Dues: Does your profession require continuing education credits? Do you subscribe to books or websites that help you keep your skills current? Do you belong to business networking groups or other professional association groups? All of these expenses are fully deductible!
- Retirement Savings: The IRS offers a generous tax break to self-employed individuals who contribute to a qualified savings plan. One of the most popular is a simplified employee pension plan, or SEP, and can offer big tax advantage. Contribution limits are up to 25% of your net earnings from self-employment up to $53,000 a year. Those contributions are deductible from your income taxes, and can add up in a hurry if youâ€™re making substantial savings to your SEP plan.
- Tax and Financial Services: The costs of having your bookkeeping and tax returns prepared by a professional are fully deductible and will pay for itself many times over – not just at tax time but throughout the year. The tax professionals at Person CPA Group keep up with the minutiae of the ever-changing tax code and identify opportunities for you to lower your taxes and increase your profitability by ensuring you are structuring your revenue and expenses correctly. Hiring a professional CPA will not only save you time and money but will also reduce the risk that an improperly prepared tax return will be flagged for audit. Get started TODAY with our FREE Tax Analysis that will identify all of the credits and deductions available to you this year as well as any you may have missed last year.
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