For small businesses, employee benefit write-offs can make the difference in owing and not owing taxes or paying more in taxes than you are required. That is why it is vital to have a good idea of what these write-offs may be and to take advantage of them wherever you can.
Deductions You Can Claim
Most small business owners understand how employee wages and taxes are allowable write-offs. However, there are some lesser known employee benefits you can claim on your tax return that you won’t want to miss, as follows:
- Sick or disability pay: As long as these loss of pay items are not paid by another source, you can claim them.
- Reimbursement or direct pay of travel expenses: If your employee is traveling for your business and has such expenses as hotel, flights, gas, meals, parking, tolls, entry fees, car rental, Uber, subway and any other travel related items, you can claim these on your tax return. Again, the costs must be reasonable and your business must pay or reimburse for the expenses in order to claim them.
- Health insurance premiums or HSA contributions: Health insurance premiums are a fairly well understood tax write-off. However, HSA or Health Savings Accounts are somewhat new and some employers may not be aware of the deductions you can claim if you set up this type of account for your employees. HSA accounts are meant as reimbursement plans for deductibles, co-pays and those items not covered by high-deductible health insurance. Employees contribute tax-free to the plan but employers may help out as well. There are limitations that change every year so do your research before you move forward with this one.
- Adoption or daycare assistance: Some employers provide a program to reimburse employees for adoption or dependent care expenses. This financial assistance can be claimed on the employer’s tax return as it is a fringe benefit.
- Education assistance: Another fringe benefit that some employers offer is education reimbursement. If an employee is attending school while working for your company, you can provide reimbursement for the cost of classes and books.
- Awards: This would include anything given to an employee for his/her service. It could encompass length of service, safety, and achievement awards. These gifts must be intangible such as cash, cash equivalent, gift cards, or certificates. The IRS is specific about what these awards can consist of, how they can be given, and maximum allowable amounts. Consult with us for a better understanding.
Trust the Professionals at Goldin Group
At Goldin Group LLC, we understand that as a business owner, keeping up with accounting and taxes is time-consuming and can even be overwhelming. We can help you with all of your small business write-offs and tax preparation, and much more! We work with individuals and businesses in Maryland (DC Metro Area), offering a variety of financial services designed to save you time and lower your tax burden. If you are a small business that is looking to outsource your accounting or if you need help managing any aspect of your business’s or nonprofit’s finances, we want to hear from you. Call us at (301) 913-0008 or email firstname.lastname@example.org to make an appointment.