You may think you know all the deductions and credits your business is entitled to, but that is generally not the case. We have tons of clients who are shocked at all the ways they can lessen their tax liability. To help, we offer these 6 business tax deductions you may not know.

1. Business Startup Costs

Did you have to purchase books, studies, or perhaps someone to reach your business for you before ever applying for a loan or license? These costs are deductible as startup costs in addition to any other initial costs. This includes:

  • Any classes you may have to or elect to take.
  • Any certifications, licenses, permits, or other similar items needed for your business.
  • Insurance costs associated with your business.
  • Research for your market, products, audience, etc.
  • Training for yourself and/or your workers.
  • Travel when looking for investors, clients, consultants, workers, etc.

Did you know? Over 5.1 million new businesses are started each year? This represents 47.8% growth since 2019. Source: Commerce Institute

2. Storage Costs

You may need to store any number of things for your business. Whether it’s a warehouse full of unsold goods or your digital data, these are all tax deductible. This can even include any parking costs associated with your vehicle, company vehicles, and even worker parking – especially if you include it as part of their pay.

3. Security

Your business most likely have some sort of security system. It can be as small as a specialized lock or as vast as hiring an outside firm to conduct security. Security may be deductible whether it is full time or part time during off hours. An alarm service also counts under this deduction. Security can even be deducted if you have a security software, program, or other measure to protect your digital assets.

4. Contract Work

Did your business suffer some sort of damage like a broken pipe or an electrical failure? Do you need a contractor to expand your business whether physically or digitally? Any contract work done for your business may be tax deductible. Be sure to get an invoice with an EIN or similar number for your business to claim.

5. Unpaid Debt

You may send out invoices, loans, or other form of money and never be repaid. Did you know what you can claim this as a deduction? This is done during the year when you finally give up and realize you will never see that money, and there is “no longer any chance the amount will be paid.” However, if the debt is paid in the future, you may have to amend the tax return associated with this.

6. Taxes

You can even deduct other taxes on your federal tax return under the right circumstances. State income taxes that are directly linked to your business (not applicable in Texas) may also be deducted. You can also deduct Medicare, Social Security, and FUTA taxes you pay as an employer. Other taxes that may be eligible for business deductions include personal property tax, real estate tax, sales tax, fuel tax, and more. See IRS Guide 334 for more information.

Business Tax Deductions You May Not Know in Houston

Is your business located in Houston and could use some help with its tax liability? Feel free to contact us to learn about all these and other tax deductions you may not be getting.