In this blog we go through the following:
Tax Deduction for Business
It’s never too early to start thinking about and preparing for year-end taxes. There’s usually one way or another to recover the expenses paid that went toward running the business. In fact, many business owners are losing out on getting exempted from the following business purchases. Here is just one of the many tax write-offs that could be deducted from taxes that business owners should know and be aware of. Check out the rest of the Tax Deductible Purchases blog series to see how you can save money from these business expenses.
What is a Tax Deduction/Write Off
Also known as tax write-offs, are eligible expenses that you can deduct from your income for tax purposes. This lowers a person’s or organization’s tax liability by decreasing their taxable incomes. Business owners can end up saving a lot of money, but don’t realize that certain types of business costs are qualified for a tax deduction. There are two types of deductions, standard and itemized.
Medical Dental Expenses
Typically, if the company is offering health insurance, they pay a portion of the employee’s package while the remainder is covered by the employees themselves. For business owners, medical expenses would be categorized as personal itemized deductions on 1040 forms. Keep in mind, personal medical bills do not count towards a business expense.
What Are the Rules?
According to the IRS, the following is considered medical care expenses:
Prevention of disease, or
Payments for treatments affecting any structure or function of the body
Here’s a video where we take you through an example of how a tax break works:
Here’s an Interactive Tax Assistant from the IRS to help determine if you are eligible for a medical/dental deductible. This resource includes a list of all the information needed to determine whether or not you qualify. Please visit their website for more details to help your specific situation or contact us today for a free consultation.