Running a successful small business means paying for equipment, supplies, rent, and many other necessary expenses. While you may not always be able to control those costs, many business purchases can be deducted on your taxes, which could save thousands of dollars on your bill every year. Taking the following deductions will leave more money in your pocket, which you can use to keep taking your company to new heights.

5 Common Small Business Tax Deductions

1. Qualified Business Income Deduction

The 2017 tax system overhaul introduced a new 20% deduction on qualified business income earned by pass-through entities such as LLCs or sole proprietorships. If your income is below $157,500 (or $315,000 for married entrepreneurs), you can take 20% off the top regardless of your industry. Income and industry limits do kick in above a certain level, so speak to a professional to find out whether you qualify.

2. Vehicle Expenses

Whether you use your own vehicle for work or have a business truck, some of those expenses may be deductible. For instance, you may be able to deduct the miles traveled, fuel costs, and even your maintenance expenses. However, each of these costs must be carefully documented, so always keep your receipts.

3. Contractor Payments

Many small business owners depend on freelancers to handle projects or provide special expertise. They also handle their own income tax payments and calculations, which takes the pressure off of you. Anything you pay to an independent contractor is fully deductible, but you will have to issue a 1099-MISC to anyone who earned more than $600 in a given year.

4. Property Depreciation

Depending on the size of your business, you may have to deduct the cost of new equipment over time as the property depreciates. However, most small businesses can take advantage of Section 179, which allows you to deduct up to $1 million in capital expenses in a single year.

5. Startup Costs

If you’re just getting your business off the ground, you may be able to deduct the investments you made before opening. Writing off market research studies, attorney’s fees, product development costs, and testing expenses can dramatically lower your taxes in your first year, when you need those savings the most.

Taxes are always complex and confusing, especially for small business owners and self-employed entrepreneurs. For 22 years, businesses throughout the Charlotte, NC, metro area have relied on US Tax Express to maximize their deductions and lower their burden. Learn more about their wide range of services online or call (704) 817-9517 to make an appointment with an experienced advisor today.