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Top Tax Deductions and Credits for 2024: Increase Your Profits
Blog / Marketing / Feb 29, 2024 / Posted by Melanie Musson / 13

Top Tax Deductions and Credits for 2024: Increase Your Profits


As tax season rolls around, many small businesses are searching for tax deductions so they can improve their profitability.

There are several deductions that you can apply to your small business that can help you succeed financially. Read on to discover the top business tax deductions, including commercial car insurance premiums, vehicle costs, energy-efficient upgrades, and more.

Business Insurance Premiums Are Tax-Deductible

As a general rule, business expenses are tax deductible. Since business insurance is directly related to protecting your business interests, the premiums are tax-deductible.

A business may have several types of insurance policies:

  • Commercial liability
  • Cyber insurance
  • General liability
  • Property insurance
  • Vehicle insurance

All of these types of coverage are tax deductible, but you’ll need to be careful with vehicle insurance, as explained below.

Vehicle Costs Are Tax Deductible

If you have a vehicle that you use for work purposes, the expenses relating to that vehicle are tax deductible. If you’ve entered the car buying maze , you’ll be happy to hear that even the purchase price is tax-deductible.

If you claim the standard mileage deduction, the standard deduction is configured for vehicle insurance. However, if you itemize, you can claim a deduction for either full coverage car insurance or liability-only insurance premiums.

If you have a vehicle that is used solely for business purposes, your best option is usually to itemize all vehicle expenses and deduct them all.

However, if you use a vehicle for both personal and business, a mileage deduction is usually your best option. With a mileage deduction, you track how many miles you drive for work and take a standard deduction based on that number.

Equipment Purchases Are Tax Deductible

If you made equipment purchases this past year, chances are good that you can deduct those costs. New computers, chairs, tables, and supplies can all be deducted.

If you wait until tax season to make a list of all your purchases, you’ll likely forget many items. Instead of depending on your memory, use a business expense tracking app so that at the end of the year, you can pull the information and receipts and accurately and easily save on your taxes.

Energy-Efficient Improvements and Tax Credits

There are many benefits to using renewable energy. Many energy-efficient items, from vehicles to property improvements, can earn you extra tax credits. If you’ve made qualifying purchases, take advantage of the incentives and help your profitability even more.

If you improve your building’s efficiency by 25% or more, you can earn a tax credit of 50 cents per square foot for 25% and an additional two cents for every additional percent to a maximum of a $1.00 credit for buildings with 50% increased energy efficiency.

FMLA Tax Credits

If your business offers paid Family and Medical Leave Act (FMLA) benefits, you can qualify for a tax credit for money they pay employees who take a leave of absence for allowed reasons.

This tax credit covers a percentage of payments made to employees during a leave, so if you’ve offered this benefit, you’ll see a return of 12.5% to 25% of what you paid the employee while they were gone.

Your business could save thousands of dollars on taxes with these credits and deductions. Those savings can go back into building your business and increasing your sales for even more profitability next year.

About Author

Melanie Musson, a published insurance expert, is the fourth generation in her family to work in the insurance industry. Over the past two decades, she has gained in-depth knowledge of state-specific insurance laws and how insurance fits into every person’s life, from budgets to coverage levels. She specializes in autonomous technology, real estate, home security, consumer analyses, investing, digital security, and business finance.


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