Just like any individual, businesses are also interested in ways of reducing their taxes—and there are several tax deductions that businesses can qualify for.
Equipment and Software
Businesses can qualify for a tax deduction for select equipment and software purchases made throughout the year according to Section 179 Deduction publication from the Internal Revenue Service (IRS). Potential eligible items include:
- Upgraded or new machinery
- Office furniture
- Computers, laptops, and printers
- Computer software and programming
- Energy saving equipment
Insurances purchased by businesses can also be used as a tax deduction. Typically, policies for workers’ compensation, property insurance, and malpractice can be deducted; however, group life insurance or commercial car insurance are not tax deductible under most circumstances. In addition, some small businesses may be eligible for the small business health care tax credit.
Read More: 10 Reasons To Get Business Insurance
Donations and Charitable Contributions
It is not uncommon for businesses to take part in community activities, sponsorships, or get involved with a charity they hold dear to their values. Cash donations to charitable organizations are tax deductible. Businesses may be able to even deduct
Employment of Qualifying Employees
Businesses can be awarded through taxable deductions for investing in their employees with disabilities or hiring veterans. If your business modified work processes or added equipment that allowed people with disabilities to perform a work task, you may qualify to deduct the expense for doing so. The Work Opportunity Credit is also offered by the IRS for companies that hire veterans.
The information and statements above are intended for educational purposes only and are not intended as specific tax or legal advice. Magruder Agency cannot provide tax or legal advice. You should consult a tax and/or a legal advisor regarding your particular circumstances.