Important LLC Tax Deductions You Need to Be Aware Of

5 LLC Deductions You Shouldn’t Miss On Your Return

Many businesses choose to incorporate as a Limited Liability Company (LLC) because of the tax benefits. One major benefit is the ability to deduct the cost of start-up expenses, regardless of how you designate the business for tax purposes. In order to qualify, your LLC must accumulate the expenses before beginning normal operations. You may then deduct the costs after normal operations begin, as operating business expenditures. Below is a list of important LLC tax deductions you need to be taking advantage of as a savvy business owner:

Cost of items bought for doing business:

These costs can be deducted on your Schedule C or Business Tax Return. There are a variety of categories for expenses, and the IRS takes a close look at each one. Make sure to keep business receipts, records, and what each item was used for in case you are audited or the IRS asks deeper questions. Some taxpayers have even been asked to quantify the amount of money saved or gained by using the purchased item or service. Item categories include:

  • Advertising/Promotion
  • Commissions and fees
  • Contractor Labor
  • Professional services
  • Office expenses
  • Office supplies
  • Travel
  • Meals and Entertainment
  • Utilities

Home Office Deduction:

If your LLC is set up in your home, there are specific deductions you may be eligible for.

Charitable Donations:

Any contribution a business makes to a 501(3)c non-profit organization or any recognized charity can be deducted from the company’s taxes. Donations can be used to offset up to 10% of the total taxable income.

Health Insurance:

If the owner of a taxable LLC is also an employee, his or her health insurance premiums for a single or family can be noted as an LLC tax deduction.

Automobile Expenses:

Many businesses rely on automobiles to transport them to business meetings, events, and regular daily business activities. Expenses can be deducted. Mileage, fuel, and repairs can all be covered as business tax deductions. Maintain receipts or miles driven for business purposes, and claim specific amounts on your tax return. Note: If a company buys or leases a car that is specifically a company car, and is only used for business, the lease or purchase amount can be deducted as a business expense.

The qualified accountants at Shayne R. Neuwirth CPA, PLLC have extensive experience preparing taxes and bookkeeping for LLC. We know the ins and outs, and will ensure your LLC receives the maximum tax return with minimal hassle. Call us today at 480-393-0755 to schedule a consultation, or schedule online.