Small Business Tax Breaks

Written by Lori Covington
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Small business tax breaks include hiring incentives, mileage and fuel deductions, deductible property depreciation and deductions for health insurance. Depending on the state, town or city where your business is located, there may be other incentives for small business.

Tax breaks may be calculated at tax time as either credits or deductions: the IRS provides for small business owners who wish to itemize their eligible expenses and claim them as credits rather than reducing the overall profit of the business by claiming them as deductions.

Just as individuals may find they reduce the amount of taxes they pay by itemizing deductions rather than taking the standard deductions, small business owners may reduce their taxes by comparing tax strategies. The recommended way of deciding whether to use credits or deductions is to calculate your business taxes twice, once using deductions and once using credits, then choosing as your final form the calculation that gives you the more desirable outcome.

Other Small Business Tax Breaks

Other tax breaks for small business include deductions for the business use of your home, start up costs, health insurance and retirement plans for the self-employed. Because tax laws change every year, small business tax breaks may change, with percentages and monetary allowances increasing or decreasing from year to year. To make sure you derive all the possible benefits that accrue to small business owners, consult with a tax professional, or consider taking online and computer courses on taxes.


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