Blog

Tax season often brings anxiety, especially for small business owners in South Jersey. However, understanding which deductions you qualify for can significantly lower your tax bill. As the best small business accountant in NJ, TMD Accounting is here to help you maximize your savings. Let’s explore the top tax deductions every South Jersey small business should know and ensure you keep more money in your pocket.

1. Home Office Deduction

If you run your business from home, you can claim a home office deduction. This deduction is common among small businesses in towns like Glassboro, Deptford Township, and Washington Township. It allows you to deduct expenses related to the portion of your home used for business.

• What you can deduct: Part of your mortgage interest, rent, utilities, insurance, and repairs.
• Tip: Ensure your home office is used exclusively and regularly for business. Therefore, keeping accurate records is essential.

2. Vehicle Expenses

Do you use your personal vehicle for business? If so, you can deduct costs related to its business use. This deduction is particularly beneficial for service-based businesses that frequently travel around South Jersey.

• What you can deduct: Expenses like gas, maintenance, repairs, insurance, and depreciation.
• Tip: You can choose between the standard mileage rate and actual expense methods. Speak with your small business accountant in NJ to find out which method offers more savings.

3. Payroll Expenses

Paying employees is a significant expense for many small businesses. Luckily, you can deduct payroll expenses, including wages, salaries, bonuses, and employer contributions to benefits.

• Why it matters: This deduction can reduce your taxable income substantially.
• Local relevance: Many Gloucester County businesses rely on payroll services in New Jersey to manage these expenses efficiently.

4. Health Insurance Premiums

Health insurance premiums can be a huge cost, but they’re deductible. If you provide health insurance for yourself, your family, or your employees, this is a tax-saving opportunity.

• What you can deduct: Health, dental, and long-term care insurance premiums.
• Pro tip: Consult with an accountant for small business owners to maximize this deduction.

5. Retirement Contributions

Saving for retirement is wise, and it can also reduce your taxable income. Contributions to a Simplified Employee Pension (SEP) IRA or a 401(k) plan are deductible.

• What you can deduct: Contributions for both your employees and yourself.
• Why it’s important: Setting up a retirement plan can help you save on taxes while planning for the future.

6. Advertising and Marketing Expenses

Advertising is crucial for attracting new customers to your South Jersey business. Fortunately, the money spent on advertising and marketing is deductible.

• What you can deduct: Costs for website development, social media ads, print ads, business cards, and other promotional materials.
• Example: If you’re running a campaign to promote your business in Camden County, you can deduct these expenses.

7. Professional Services

Professional fees for accountants, bookkeepers, legal advisors, or consultants are deductible. These services are vital for ensuring your business runs smoothly.

• Why it’s essential: Hiring a small business accountant in NJ ensures you claim all deductions correctly.
• What you can deduct: Fees paid for accounting, legal advice, and other consulting services.

8. Utilities and Rent

If you rent a space for your business, you can deduct the rent and utility costs. This deduction is valuable, especially if you operate in a higher-rent area like Cherry Hill or Washington Township.

• What you can deduct: Monthly rent, electricity, water, internet, and phone services.
• Tip: Always keep copies of your rental agreements and utility bills for accurate records.

9. Business Supplies and Equipment

You can deduct the cost of supplies and equipment used for your business. This deduction benefits many industries, from construction to healthcare practices in South Jersey.

• What you can deduct: Items like computers, printers, office furniture, tools, and machinery.
• Pro tip: Utilize Section 179 to deduct the full cost of qualifying equipment in the year you purchase it.

10. Travel and Meals

Business-related travel and meals are also deductible. However, it’s important to follow IRS guidelines to claim these deductions correctly.

• What you can deduct: Expenses for hotels, airfare, meals (50% of the cost), and transportation.
• Example: If you travel to a business conference in New Jersey, you can claim these expenses.

11. Insurance Premiums

Beyond health insurance, you can also deduct other types of insurance premiums, such as general liability, professional liability, and property insurance.

• Why it’s beneficial: These deductions help protect your business while reducing your tax liability.
• Local relevance: Gloucester County businesses often use these deductions to lower their taxes.

12. Education and Training

Investing in your education or your employees’ training is deductible. This deduction helps you improve your skills, making your business more competitive in South Jersey.

• What you can deduct: Costs for courses, seminars, webinars, training materials, and workshops.
• Pro tip: Document all training expenses to ensure you claim the full deduction.

Why Choose TMD Accounting – The Best Small Business Accountant in NJ?

Claiming the right tax deductions requires knowledge and experience. By working with a skilled accountant, you can ensure every eligible deduction is claimed, maximizing your tax savings. At TMD Accounting, we specialize in helping small businesses in Gloucester County and Camden County with comprehensive accounting services.

Our Expertise Includes:

• Tax Planning & Preparation: We help you plan for tax season and reduce your tax liability.
• Payroll Services: Streamline your payroll processes with our expert team.
• Bookkeeping Services: Keep your financial records accurate and up-to-date.

Final Thoughts

Understanding these tax deductions can save your South Jersey small business a lot of money. However, working with the right accountant makes all the difference in ensuring you take full advantage of these deductions. Contact TMD Accounting today, and let’s work together to optimize your tax strategy.

Ready to save on taxes? Call TMD Accounting, the best small business accountant in NJ, and get started today!