Last Updated on April 18, 2023 by asifa
Every business owner looks for them to save money when it’s time for sales tax filing or when you are filing for sales tax return. They always try to save as much as they can from the sales tax. But there are some businesses who are new in the market or are small businesses, they don’t know where or how they can save money on sales tax. Not to worry, this article will help you with that situation.
Though for most of the business’s taxes may not be their favorite subject at all, but helping them save their money from sales tax while filing sales tax return will be something, they might be interested in. The IRS offers the businesses as well as entrepreneurs dozens if tax deductions from sales tax every year. These tax deductions help you with two main things, which are –
- Reduce your income tax
- Reduce your income which is subjected to self-employment tax
6 Ways for Businesses to save money on sales tax:
Below mentioned are six ways through which businesses or entrepreneurs can save money on their sales tax. They are as follows –
- Taxes
Many of the taxes which the businesses pay in the course of their business can be deducted as business expenses. Also, there are some taxes which are already included in the business expenses which you pay. For example, if you pay for fuel gas for a vehicle which you use for your business, the tax is included in the price of the fuel gas, so it is considered as a business expense.
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- Vehicle expenses
If you have a vehicle for your business, which you use to go to meetings or deliveries, for any work related to the business then that will be a valuable deduction. You can track the miles for which the vehicle has been used for the business and then deducted it from the sales tax as a business expense during sales tax filing.
- Self-employed health insurance deduction
If you are self-employed and you buy a health insurance for yourself then it can be deducted from the sales tax. The reason for this is that you are ineligible for health insurance benefits through an employer. Though the deduction should be less than your business net income.
- Employee benefits
If your business conducts some kind of qualified benefit programs for your employees where you give certain benefits to them then it can be considered as a deductible expense. For example, dependent care assistance, adoption assistance, educational assistance, etc.
- Phone service
If you have a business mobile phone or landline then you can deduct that phone service from the sales tax. You can get full deduction of the phone services used for the business from your tax. Though if you are using personal phone or landline for business then the IRS doesn’t allow you to make that deduction.
- Home office
If you conduct your business from your home and don’t have a place like an office for it then you can deduction the office expenses from the sales tax. So, the home office becomes a deductible expense from the tax. Though the area in your house where you conduct business should be for business purpose only and nothing else.
Apart from that, if you are interested to know about Professional guidance on sales tax then visit our Business category.
