The tax world is complex, and when it comes to write-offs there are a number of ways that smart businesses (with the help of their tax advisors) can make the tax law work in their favour.
We’ve rounded up 5 unexpected tax deductions we’ve seen pass with the Tax Courts in the past. Your business is unique, however, so be sure to work with your tax consultant to discuss what can work for you, and where you can save on your taxes this year.
1) Pet Expenses
There’s no denying that the cost of maintaining a pet can be expensive. While typically these costs are considered to be personal expenses, there have been cases where businesses have proven how vital their pets were to the business, and were able to have those expenses deducted from their taxes.
For example, a couple who owned a junkyard was allowed to write off the cost of cat food they set out to attract wild cats. The cats came for the food, but they also kept the property free of rats and snakes, making it safer for the customers.
As with any claim, be prepared to back it up with documentation and facts. Simply claiming Fido as your office guard dog is not likely to get you far.
You heard us — magazine subscriptions that relate to your industry or line of work can be written off. This also applies to books and newspapers that are specific to your industry or help you in your business. So, go ahead and renew that subscription for the office — it’s a write off!
3) A Trip To The Caribbean
Trying to find the most economical means to schedule in a little vacation time? Business conventions held in Bermuda or other countries in the region are deductible without having to show that there was a specific reason that the meeting was held there. The same holds true for meetings in Canada, Mexico, and the United States.
If you’re looking for something a little bit more exotic though like Europe or Asia, think again — these locales are not deductible unless you can prove that the long haul trip was as necessary for the business as if you stayed closer to home.
4) Significant Others
Is your significant other a dependant? Have you lived together for an entire tax year? If you answer “Yes” to these questions, then it may be possible to claim your significant other as a tax break when it comes to tax time.
Bear in mind there are certain numbers that will need to be met, including showing that they made less than a certain amount each year, combined with proving that you paid for more than half of your significant others’ expenses. If it all pans out (after you’ve spoken with a professional tax consultant, of course), then you may qualify for this tax break.
5) Sport Utility Vehicles
You’ve probably heard that entrepreneurs or small business owners can claim some of their vehicle and/or mileage costs, but did you know that the type of car you own can also affect the tax advantages you get?
It’s no coincidence that a lot of business owners drive massive SUVs. The tax law actually encourages businesses to buy vehicles and invest in themselves. In order to qualify for the tax breaks, however, the vehicle must be brand new and also must weigh over 6,000 pounds. Hence, large SUVs.
More information on this can be found here, and as always, be sure to consult with your tax advisor to help you navigate the complexities around these clauses.
The complex world of tax is, well, complex. Use this guide as inspiration when you talk to your tax advisor and think outside the box as you prepare your taxes this year. There are numerous deductions available to you as a small business owner — you just need to get creative and know where to find them!
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Do you have any other random write-offs you’ve found for your business? Let us know in the comments below, and be sure to subscribe to the Trippeo Blog to stay up-to-date with the latest expense and financial news!