Ok, let us be the first to say we are not tax experts (far from it!) but we have picked up a few lessons along the way – and whenever we get wind of something that can save small businesses like us money, we want to shout it from the rooftops! So read on for an important tax saving tip that may just save you some serious cash this upcoming tax season.
I file as an LLC, can I write off the processing fees I incur by processing online payments?
According to this article from Investopedia, most “businesses can deduct all credit card fees as well as finance charges.” This is AWESOME news for many businesses as this reduces total taxable income significantly! And with online payments on the rise, processing fees are going to continue being a necessary (and growing) business expense.
According to the same source, for those who file as “Individuals or sole proprietors,” unfortunately “Credit card fees are not deductible.”
But don’t worry! There are tons of resources about other tax deductions for the wedding pros! We did a little digging and put together a list of top 5 tax deductions that wedding pros should know about…and take advantage of!
5 tax deductions for wedding pros!
- Office Expenses. Whether you rent an office space or slay that work from home hustle, according to TurboTax, you can “deduct the expenses related to maintaining your place of business.” Think in terms of rent paid, phone or internet, utilities, and more!
- Business equipment. While most of us in the wedding and event biz aren’t purchasing large-scale equipment or machinery, we are reliant on our computer, tablet, or smartphones to get our jobs done. These items are absolutely deductible! As always, keep those receipts and try to do a little research before filing as there are a couple of different ways to deduct business equipment expenses.
- Transportation. Who doesn’t take the occasional road trip to visit a venue, attend a food tasting, or meet with other vendors? These types of business trips can be deducted as a percentage of your overall car expenses. Total up your mileage, gas, repairs, car insurance, and interest. Then determine what percentage of your yearly mileage was spent driving for business-purposes. Example: if 30% of your total miles was spent on business-related driving, deduct 30% of your car expenses from your business income.
- Travel and meals. Our industry is anything but ordinary! And many times events call us to unique, remote, and faraway locations (still waiting for that Bali wedding booking!) Don’t eat these travel costs – according to TurboTax, these expenses are 100% tax deductible and encompass “airfare, ground transportation and hotel accommodations.” And this category isn’t just for business trips – it also applies to any meal you treated your client to. Note that 50% of meal expenses can be deducted. Don’t forget to capture a few quick notes about the client and purpose of the meal for airtight bookkeeping!
- Marketing and Advertising. This can be a big one! Marketing and Advertising is likely a significant expense for many of us – especially for those just getting started and promoting our business in every way possible! Take note of this list of approved deductible items (some surprised us!!):
- Business cards
- Business stationery
- Direct advertising costs, like newspaper and magazine ads
- Maintaining a website
- Flyers or brochures
- Referral fees you pay to obtain clients
We will keep our ears and eyes open for more tax saving tips! And please let us know if you’ve discovered any along the way as well!