The single most important difference between the individual taxes you must pay and the business taxes filed on behalf of your company is the fact that you often need to pay more in the latter. Of course, this fact is somewhat offset by the ability to declare many business expenses as tax-deductible. In fact, if you can declare enough business expenses, you can end up paying fewer business taxes than individual ones. The sole caveat to this is that federal income taxes are never deductible – since this is what keeps the government running, in effect. In this following short article, will take a look at some of the business taxes that are eligible for deductions.
Business Taxes that Qualify as Deductions
Since you’re running a business, you likely have employees; as a result, you can take advantage of the fact that a portion of payroll taxes are considered deductible – not including the Medicare and Social Security portion of employee pay, since these are federal.
Similarly, there’s an aspect of self-employment taxes that are deductible, and thus considered business taxes. The primary reason for these taxes is to help guarantee your Medicare/Social Security benefits in the future. Just keep in mind that you cannot deduct everything in this scenario, but you can exclude half of the tax amount in the personal adjusted gross income section of your tax returns.
A Few Other Tax Deductibles
There’s a lot of information to cover with this subject, so we’ll touch on a general few. You can deduct business taxes for home-based business just like you can for office-based companies; just make sure to exclude the sections of your home that you use for personal, non-business-related endeavors. If you are a real estate investor, make sure to rightly-divide the taxes associated with state income tax and the ones associated with your personal use; the latter cannot serve as deductions.
There’s a wealth of information when it comes to properly deducting business taxes; the professionals at Crimson Stone Capital Solutions can help you get the biggest bang for your buck. Contact us today.