As a business owner, you know that there are certain expenses that you can write off as a loss. This is helpful when it comes time to file your taxes. Make sure that you are aware of these three common expenses that business owners can write off.
Keep in mind that this is not an exhaustive list, and you should always speak with a tax professional to find out what deductions are available to you.
Theft
Though it’s often an unanticipated and disappointing loss, theft is one expense you can write off. Whether it’s a break-in to your home or business or a mugging, being the victim of theft comes with some financial relief in the form of a tax deduction.
The amount you can deduct depends on the value of what was stolen and your specific circumstances, but in general, you can deduct most types of theft losses on your taxes. So, while no one wants to be the victim of a crime, at least there’s some silver lining in the form of a potential tax deduction.
Broken Equipment
Older machines tended to last longer because of their higher build quality. When a machine breaks down, it often costs more to fix it than the machine is worth, making it a total loss. Interestingly, this broken equipment can actually be written off as a loss on your taxes.
So, if your business has suffered a setback due to broken equipment, there may be some financial relief available. Of course, it’s always best to avoid such losses in the first place by investing in high-quality equipment. But if something does go wrong, it’s good to know that there may be some help available.
Depreciation
Depreciation is an often overlooked expense that can be written off as a loss. Depreciation is the reduction in the value of an asset due to wear and tear, age, or obsolescence. For businesses, this can be a significant expense, as it represents the portion of an asset’s purchase price that is not expected to be recovered through sale or other means. Given the importance of depreciation in business accounting, it is surprising that more people are not aware of it. However, with a little bit of research, anyone can learn how to take advantage of this important tax deduction.
These are just a few of the many expenses that you can write off as a loss as a business owner. While it’s always best to speak with a tax professional to get the most accurate information, this list should give you a good idea of what kinds of deductions are available to you.
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