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Wyoming Business Tips for March 22

March 13, 2015

A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.

By Robert Condie, Southwest WSBDC regional director

“I have a small business and, with tax season right around the corner, what are some deductions I can use that I might not know about?” Doran, Mountain View

Along with the joys of owning your own business also comes the seemingly daunting task of filing a tax return for your business.

Although the use of software and a qualified accountant are great ways to make sure you receive all deductions available, here are a few basic tax tips that you can use to save a little money on your return.

-- Home office: One of the most important things to remember about deductions is that not taking a deduction for fear of an audit is not what you want to do. If the claim is legitimate and you have the necessary paperwork to back up your claim, there is nothing to be worried about.

Make sure that your office is distinct from your living area. Whether it is a room of its own or a part of a larger space, there should be a clear line between your workspace and the rest of the home. Do not use your office as a spare bedroom or a playroom for the kids.

Figuring out the percentage of home expenses that is deductible for your business is simple. Measure your work area and divide by the square footage of your home. That percentage is the fraction of rent, mortgage, utilities, taxes and maintenance you can claim.

-- Travel costs: Since travel can be necessary for business success and expansion, many of the expenses are completely tax deductible. A tax tip on travel is to write off expenses like airfare, hotel fees, car rental and travel expenses such as laundry costs. Food is only deductible up to 50 percent, probably because the government figures you would have to eat whether you are traveling or not. Remember these points when deducting business travel expenses.

Feel free to take your family with you, but only the costs for you, and only those that are business-related can be deducted. If you take clients out for a meal, those costs are 50 percent deductible. Just make sure to write on the bill/receipt the reason for the meal. Conference fees also are deductible as long as the conference is directly useful for your business. If it is a conference related to your industry or will help you run your business more smoothly, then it probably qualifies.

-- Record keeping: As always with finances, especially taxes, it is important to keep your receipts and details about the reason for purchases. If doing so for every purchase seems like a lot to do, just get in the habit on business transactions, and then it will become second nature.

If you are audited, knowing that all the transactions are well documented and waiting for the auditor, it makes it easier for you to avoid costly IRS penalties. The cost of running and maintaining a business is high, but many of those costs can be reduced by filing your taxes knowledgeably. It is never profitable to leave money on the table. Do your research, take the time to do your taxes correctly and completely, and put the money you save back into your business.

For more in-depth clarification, visit www.IRS.gov or talk to a qualified certified public accountant.

A blog version of this article and an opportunity to post comments are available at http://wyen.biz/blog1/.

The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email wsbdc@uwyo.edu or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.

Contact Us

Institutional Communications

Bureau of Mines Building, Room 137

Laramie

Laramie, WY 82071

Phone: (307) 766-2929

Email: cbaldwin@uwyo.edu

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