Small Business Tax Deductions for 2011, 2012

As a small business owner, you know that taxes are one of, if not your biggest and most formidable expense. This includes income taxes, payroll taxes, sales taxes and property taxes. Below are some thoughts on how you can claim more small business deductions.

First, be sure to prioritize the deductions you take for their tax value. For example, if you have significant physical capital, owning or more businesses, the largest deduction your business may have could be depreciation. If that’s the case, you probably already know how important it is to choose the best depreciation schedules for your business. Literally, this can save you thousands of dollars every year based on how you choose to allocate depreciation.

Other significant deductions for nearly every small business include vehicle expenses, office expenses, Section 179 deductions for business equipment, interest expense, and obviously payroll costs.

Second, recognize that every one of these deductions has a corresponding cost representing a need the business has to cover. As you go about tax planning, one easy mistake to make is to let the tax tail wag the business dog. A better way of looking at your tax line item in your budget is to treat as what it is – one of many expenses you have, and one that is significantly, but not entirely controllable. Address your tax liability as part of a more comprehensive budget plan rather than an isolated expense to be avoided at any cost.

Finally, when you take stock of what you filed in previous years – as compared to what you will file this year, carefully review changes in the law and deductions you might have missed in earlier years. There are a variety of IRS publications and many other places you can seek out the information that will help you save – and save – and save!

You'll find everything you need at TurboTax Online to help you maximize your small business tax deductions and credits.