Tax season doesn’t have to seem like a nightmare to your bottom line. Part of setting your small business up for success is maintaining good bookkeeping records that track all your expenses. Simple items that you may not have considered could count as electrician tax deductions that reduce the blow when you pay Uncle Sam. As you prepare to file your federal return, it is a good idea to work with a tax professional who will help you take advantage of the small-business tax deductions available to you, maximize your savings, and give you insight into how you can focus your spending on services that will improve profits.
Deductions for Electrician Taxes
Professional Memberships and Dues
Union dues, professional association membership fees, big-box store memberships, insurance premiums business licenses, and trade subscriptions may be tax deductible. If you are not a small business owner, but work for an electrician, you may also deduct the cost of membership to civic organizations.
Education and Training
Continuing education is a requirement for electricians to maintain their licenses. They are also fundamental to specializing in niche markets, such as solar and wireless technologies. If you pay for employee training, tuition costs might be tax deductible. Similarly, if you pay for classes out-of-pocket, you may deduct the cost of tuition, transportation costs, licensure fees and classroom materials.
Tools and equipment that are necessary to perform electrical work are generally tax-deductible if you replace them annually. Electrician tax deductions for tools and equipment that last longer are eligible for a different type of deduction because they depreciate in value with time.
If you are a business owner, you may receive deductions for the cost of purchasing and maintaining fleet vehicles. The government may also offer tax incentives if you purchase eco-friendly vehicles.
As an employee, you may deduct expenses related to maintaining, cleaning and fixing your employer’s vehicle if the company does not reimburse you.
Travel and Meals
Rather than reimburse fuel costs, the government offers deductions based on how much you travel. At the time of publication, the standard mileage rate for businesses is 53.5¢ per mile. This rate changes annually. To tax advantage of mileage deductions, keep track of how much you and your employees drive for work-related purposes. Do the same if you are an employee and use your own vehicle to transport equipment and tools because of a lack of secure overnight storage. Additional travel-related expenses that you may deduct include work-related tolls, parking, public transit, overnight lodging and taxis.
The IRS will deduct up to 50 percent of meal costs that are directly related to doing business, such as buying sandwiches for the office or taking a client out to lunch. As an employee, you may deduct a portion of meal costs when you work overtime or are traveling overnight for business.
Whether you run your business out of a commercial office space or a room in your home, you may deduct some or all rental or mortgage costs, utilities, and maintenance and repair costs.
If you spend money on your business, there’s a good chance that you can deduct the related expenses. A good accountant will help you identify deductions and tax incentives that apply to your operations. Stay ahead of the game by tracking your expenses using 360e. The intuitive program makes it easy to record labor hours, material costs and other expenses, simplifying your tax season preparations. The program also allows you to save copies of scanned receipts, allowing you to keep all your documents in a central location. Sign up for a free trial of 360e today to see how simple it is to get more done, increase your profits and stay organized.