1. Rent and utilities
Do you lease office space for your Coeur d’Alene business? Regardless of whether it’s a desk in a co-working space or an entire commercial building, CDA freelancers and entrepreneurs can claim CDa business rent as a tax deduction.
The same goes for any utilities you pay for your office space—yes, the government cuts you some slack for keeping your lights on. This includes electricity, gas, telephone bills, and water bills.
2. Home office
For many of us freelancers, our homes pull double duty as both a residence and our workspace. Many Coeur d’Alene freelancers and sole proprietors work from home, so their residence is technically also their place of business. Don’t fret—you can claim a portion of the cost of your home office as well.
According to Publication 587 (Business Use of Your Home), you can deduct a portion of expenses for your home office. But don’t confuse these necessary costs of running a Coeur d’Alene business with your personal rent and utilities. The two are completely separate CDA deductions, so make sure you treat them as such in your paperwork.
Some of the typical costs you can include as part of Coeur d’Alene business-use-of-home deductions are:
- Utilities (heat, electricity, water, Internet)
- Mortgage interest
- Property taxes
- Home insurance
Before you jump on this deduction, however, make sure your home office meets the basic criteria. According to the IRS, your home must meet these two basic requirements:
- Regular and exclusive use
- Principal place of your business
You can also lean on this IRS guide to using their simplified or regular method to calculate these costs.
3. Advertising expenses
Whether you’re a sole proprietor or have a growing team, you likely spent some of your hard-earned dollars advertising your business last year. If so, those expenses could be deducted on your year-end filing.
Whether you spent your advertising budget last year on business cards, billboards, or anything in between, you can claim those Coeur d’Alene expenses.
You can also claim:
- Promotional and branded swag (think keychains, pens, coffee mugs, tote bags)
- Website costs (hosting, design, maintenance)
- Online advertising (banner ads, Facebook ads and other paid social media ads)
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Many Coeur d’Alene entrepreneurs and freelancers have insurance policies to protect themselves, their business, and any equipment. And many of these expenses can be deducted on your filing.
- Liability insurance premiums
- Commercial property insurance costs
- Coeur d’Alene Business interruption insurance
- Insurance on any equipment (other than vehicles, which is deducted as part of vehicle expenses)
5. Legal and professional fees
Did you seek advice from a lawyer to start up your business? Or did you rely on an accountant to file your taxes last year?
If so, you can likely claim those professional fees as a deduction on your year-end filing. You’re able to deduct the cost to consult external pros like lawyers and accountants, membership fees to professional organizations and even costs for business books, industry publications, and online subscriptions
6. Retirement plans
For those freelancers or self-employed workers contributing to personal retirement plans, you can likely deduct those payments.
Note that all accounts must be qualified retirement plans: that means you can deduct contributions to plans like SEP IRAs, SIMPLE IRAs, and 401(k)s.
7.Coeur d’Alene Health insurance premiums
Staying fit and healthy can get pretty pricey—especially if you’re self-employed. That’s why freelancers and small business owners can deduct the costs of their health insurance premiums in some cases.
Those who own their own Coeur d’Alene sole proprietor business or own more than 2% of their Coeur d’Alene S corporation also have some deduction options here.
If you’re self-employed, you can deduct the health care premium payments for yourself, your spouse, dependents, and any child under the age of 27.
8. Bad debts
No matter how hard you may try, many small businesses end up with a certain amount of “bad debts” each year. Essentially, bad debts are any liabilities you can’t collect on. For many self-employed workers and freelancers, that often means outstanding invoices your customers simply won’t pay.
Depending on whether you sell goods or services, bad debts you can claim include:
- CDA Funds you’ve loaned to employees, vendors, or other businesses
- If your Coeur d’Alene business sells goods, you may deduct the costs of unpaid purchases
- The same rule applies to companies who sell services
9. Office supplies and tools
It takes innumerable supplies to keep office functioning. As a small business owner or freelancer in Hayden, Post falls, Sandpoint, or Coeur d’Alene, you need specific tools to stay sharp and ready to work—think stationery, pens, notebooks, and the litany of other items found on your desk.
While many of these items are relatively inexpensive, these small costs can add up to some serious savings when used as a Coeur d’Alene deduction on your year-end filing. Some of the more common supplies and tools included in this category are:
- Pens and pencils
- Staplers and paper clips
- Day-to-day shipping for products
- Courier expenses
- Cleaning supplies
10. Salaries and wages
As your Coeur d’Alene business grows, you may want to bring on hired hands to run certain aspects of your biz. Not only do those CDA employees and contractors provide a valuable service (i.e., their skills and work), but you can also deduct their gross salaries and wages.
If you’re a Coeur d’Alene business with employees, you can deduct:
- Payroll taxes like:
- Coeur d’Alene Employer contributions for social security and Medicare (FICA)
- Employer contributions for federal (FUTA) and state (SUTA) unemployment taxes
- Salaries and wages like:
- Bonuses and commissions
- Employee benefits (life insurance, education reimbursements)
- Per diems and allowances
- Contract wages for workers paid more than $600 in a year