According to one expert, Americans who become self-employed or start a business in 2022 should hire an accountant to file their tax returns to maximize their available deductions.
“[If] If you own your own business, have your own company, or have a rental property, I would definitely seek out a professional as there are so many deductions that most people are unaware of. increase. ” he told Yahoo Finance Live, PBS’s Opportunity Knock$ Opportunity Coach (video above).
Many new business owners may not be aware of the business expense deductions available, such as costs that are necessary and considered normal for the business.
“What people don’t know is that they can take all the expenses they use for their normal necessary business,” Barajas added.
What’s normal and necessary in one industry may be extraordinary and unnecessary in another, so it’s important to consider what your business actually needs before writing them off. .
Grant Dougherty, registered agent and founder of Dougherty Tax Solutions, told Yahoo Finance in a separate interview. “Is it normal? Is it necessary? Is it reasonable?”
For example, a business owner may deduct administrative work supplies, office utilities, or employee uniforms when required in the normal course of business.
Barajas explained two other deductions that business owners may have overlooked themselves. Home office deductions and Section 179 depreciation.
Home office deductions are available to business owners who have space in their home that is used regularly and exclusively to run their business. According to the IRS website, the area should also be a prime location for business. This deduction does not apply to W-2 employees.
“You can take a portion of where you work in your area and depreciate it compared to the whole house,” Barajas said. If you’re paying a loan, you can deduct expenses based on that percentage from your self-employed income tax, and you can take that percentage of your property tax.”
Barajas also shared rules for amortizing business expenses under Section 179.
“What most people don’t know about the Section 179 deduction is that when you buy a computer, you can write it off instead of depreciating it or buying a printer,” he said.
The IRS previously issued guidance on Section 179 deductions.
“I can’t tell you how many times I’ve had to go back and amend tax returns for people who have their own business or their own rental property and filed their own,” Barajas said. “At times like that, let’s aim for a professional.”
Rebecca is a reporter for Yahoo Finance and previously worked as an investment tax. Certified Public Accountant (CPA).
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