The world of business has experienced a lot of change in recent years, and 2022 is no exception. But for all of the change that occurs, there is one thing that always stays the same: Tax Time.

For the next tax season, we are offering some tips that business owners (and independent workers) can follow to help save money on their taxes.

1) Understand new forms and don’t double report your income

If you are self-employed, then you are familiar with the 1099-NEC Form that you receive from your clients/contractors. Now, an extra form will be required if your clients send your money through PayPal or other payment platforms like Venmo. Get caught up, and make sure you understand the new requirements.

2) Keep thorough records and learn what you can deduct

There are many opportunities to write off business expenses that you may not have considered. Even your morning coffee could qualify. Make sure to keep receipts and make good arguments for deductions where possible.

3) Even your lunch can be a write-off

The rules for business meal deductions have increased the percentage from 50 to 100% if your meal is coming from a restaurant. It doesn’t matter how it gets to you, or where you eat, just as long as it comes from a restaurant you can deduct 100% of your business meal.

4) Travel is another deduction to consider

When you are self-employed, it is important to consider the miles you drive for work, as that counts as a business expense that can be deducted. In 2022 you can now deduct 58.5 cents per mile on your taxes. Make sure to keep a record that can prove these miles were business-oriented.

5) With remote work becoming more prominent, home offices offer another tax break opportunity

If you have the receipts for items around your home that constitute a “home office” for your business, then you can claim these as a deduction on your taxes as well.

6) Claim special tax breaks for retirement options

Solo 401Ks and SEP IRAs are examples of retirement accounts that the IRS considers liable for a tax deduction. Claim these if you are looking to add some savings towards your retirement.

7) You may be able to deduct business expenses covered by a PPP loan

If you received a PPP loan and qualified for forgiveness, the IRS typically won’t count it as part of your gross income, and you may be able to deduct business expenses covered with this money. Tax rules at the state level do apply, so make sure you discuss this with a qualified professional.

Recommended Posts