Did You Know The Most Common Tax Deductions?

Did you know Marketing Taxes are probably the most confusing aspect of business management — their numerous types, requirements, ever-shifting rates, and subject-to-change laws are enough to make any business owner go haywire. That said, knowing all tax obligations accurately and paying them on time is crucial for every business owner. This is true for both novice entrepreneurs and well-established business leaders — it is the only way to avoid costly penalties and legal punishments.

To save you from making pricey tax mistakes and tainting your business reputation, here is a list of the types of small business taxes:

Income tax

This is the most common type of tax that almost all business owners are aware of. They must pay income taxes on their annual net income, tips, unemployment benefits, profit from a property sale, investment, and wages.

Payroll tax

The payroll tax, also called employment tax, is levied from businesses with a set of employees. The payroll tax is withheld from each employee’s salary and remitted to the government. While income taxes go into the government’s general fund, the payroll tax is used for specific programs and to fund Medicare and Social Security.

Self-employment tax

As the name implies, the self-employment tax is paid by self-employed people, including freelancers and independent contractors. Every independent worker with yearly net earnings of over $400 is liable to pay some part of the earnings to the federal government.

Excise tax

An excise tax is charged on purchasing specific goods and services, including tobacco, fuel, and alcohol. If your business operations include purchasing these products or services, you are bound to pay the excise tax on all such transactions.

Property tax

Business owners have to pay property taxes if they have a brick-and-mortar store. It is an ad-valorem tax — taxes based on the assessed value of an object — calculated by the local government, and a business owner is liable to pay the said amount.

Save money through tax deductions

The list mentioned above includes major taxes that every business owner must know about — there can be more types of taxes that you may have to pay depending on your local laws. This means businesses worldwide have to reserve a significant chunk of their profit for taxes, which is disappointing — it is disheartening to see your hard-earned money flee!

Therefore, business owners try to save their money through tax deductions. Tax deduction refers to the reduction of the taxable income to lower the tax liability — it is a lifesaver for business owners, as it significantly reduces the amount they pay on taxes.

One of the most common business costs that qualify as a deductible business expense is marketing — yes, the business aspect you probably spend the most on can help you save your money. Lately, the Internal Revenue Service (IRS) declared that the business expenses that help you build a positive public reputation would be considered as a deductible expense — so you don’t need to worry if you are opting for slightly expensive Triangle Web Design, Print Design, or Infographics Design Services, after all, it is helping you pay fewer taxes!

After talking to an expert, you can subtract the marketing expenses from your current income, thereby reducing your taxable income. In other words, if you earn $50,000 per annum and your marketing expense is $2,000, you can subtract the $2,000 from your total income and pay taxes only on the remaining $48,000.

We are listing the marketing costs precisely for your convenience so you can claim tax deductions.

Website

As we know, websites are virtual gateways to a business that allows people to understand what the company offers — engaging and customer-centric websites have higher chances of conversions. Therefore, North Carolina-based businesses invest in Durham Web Design Services or Sanford Web Design Services.

Website creation and management costs are higher, especially for well-established firms. Fortunately, it counts as a deductible expense. If you hire a digital marketing agency in North Carolina to handle your brand’s marketing and website, you can apply for a tax deduction.

Advertisement print material

You may not realize it, but the cost of printing adds up fast, eventually becoming a huge business expense. And if you go for colored prints with a gloss finish, it may even cost you a fortune — let alone custom printing!

Here is good news, though: all promotional print materials are eligible for a deduction. So, opting for high-end companies in NC offering brochure design and magazine design should not worry you.

The tax-deductible items include:

Postcards
Business cards
Direct mailers
Flyers
Product brochures
Tradeshow displays

Digital marketing campaigns

Most businesses invest in digital marketing campaigns to expand their outreach, be more visible, reach their target audience, make conversions, and maximize profits. These campaigns are a significant part of most NC-based businesses, as it helps increase revenue. Here is a list of common digital marketing campaigns that are tax-deductible:

Social Media Marketing
Email Marketing
Influencer Marketing
Instagram, Facebook, and Twitter Campaign Ads
Google AdWords and Pay-Per-Click (PPC) Campaigns

Marketing software expenses

Today, there are many marketing software conducive to successful business management. They are designed to automate common business processes, such as lead management, to boost efficiency and minimize human errors. Companies usually buy monthly or yearly subscriptions to such software. Now, you can easily add them to tax deductions and yield financial benefits.

Common software that businesses in North Carolina use, which are tax-deductible, include:

Hubspot
MailChimp
Hootsuite

Start-up marketing expenses

Gone are the days when establishing a business was a mere pipe dream for budding entrepreneurs — the expenses made the venture seem impossible. Today, you can easily set up your small business in North Carolina without having to pay a huge sum of money as tax.

The IRS declared that you could add many business marketing expenses to the tax-deductible list. You can deduct the costs you pay before launching your business from your annual income, thereby reducing your tax amount.

Conclusion

Now that you know you are, in a way, saving when you are paying for that company offering brand design services, infographic design, or magazine design, why not hire one? If you are looking for “Triangle web design” or “Sanford web design” on Google, Print and Web Designer is here to do the needful. We are an NC-based digital marketing company offering marketing solutions — everything from graphic design to keyword research. If you are motivated to scale your business, give us a call at (336) 684-6505 or write to us at today.