10 Overlooked Tax Deductions for Small Businesses

10 items that entrepreneurs may not realize they can deduct from taxes:

Startup deductions: Business start-up and organizational costs are considered capital expenditures. For tax years beginning in 2010, owners can deduct up to $10,000 of business start-up costs paid or incurred after 2009.

Environmental cleanup costs:

  • Interest on borrowed money: If you had to borrow money for business purposes, the interest is deductible – but only if you use 70 percent of a loan for business and the other 30 percent for a family vacation. Then you can only deduct the 70 percent of the interest as a business expense.
  • Advertising and marketing: As long as they are directly related to your business, you can deduct the cost of advertising, including business cards, online yellow page ads, and “good” publicity promotions like sponsoring a charity or sports team.
  • Education and publications: Some business consultants say you can deduct costs of seminars and books, but check with your CPA on this one.
  • Retirement savings: You can deduct retirement savings, such as SEP (Simplified Employee Pension plan) contributions and IRA deposits, which are deductible for last year's tax return up until April 18.
  • Bad debts: Small business owners can deduct money the business is owed but can’t collect.
  • Cameras, computers and video recording equipment: Don’t go too crazy with this; the IRS pays attention to what constitutes business equipment.
  • Association memberships

And yet another reason to procrastinate filing: remember that you have until today to post or send in your federal taxes online, and April 19 for your state form, due to Emancipation Day. The IRS says holidays in the District of Columbia are legal holidays in the tax world.

Contact Us