It is that time of year again–tax season, and in honor of the season, ACT has put together a list of a few tax tips for small business owners.
Tip #1
You can deduct business expenses, including the expense of purchasing liability insurance. In order for a business expense to be deductible, it must be considered both ordinary and necessary. This means that it must be an expense that is considered normal for the industry, and it must offer your business an important (though not necessarily indispensable) benefit. Liability insurance usually falls under these categories.
Other expenses you might not have thought of include the cost of travel and lodging when you go out of town for art shows and conferences, or if you go to lunch with other artists to discuss ideas to improve your business.
For more information on deducting business expenses visit the IRS website.
Tip #2
Remember that you must keep records of all of your business transactions going back at least three years. This is essential in case you are selected for an audit. It will also make your life easier when it comes time to calculate your business expenses.
Tip #3
Be honest and report your cash income. This will protect you and your business in the long run.
Of course, we at BBI are insurance experts and not tax experts, so if you have questions about this information or need more information about preparing your taxes.
If you would like more information about liability insurance for massage therapists, cosmetologists, estheticians, or other bodywork professionals, visit our homepage.
Happy filing!
