7 Ways Having a Small Business Saves Big Money

If you already have a business or you’re thinking about becoming a self-employed entrepreneur, you’re in great company. According to the Small Business Administration, there are more than 30 million small businesses in the U.S.

By official measures, a small business is a venture that employs fewer than 500 workers. And surprisingly, they make up 99% of all businesses in the U.S. There are only about 20,000 large businesses, which have 500 or more workers.

Interestingly, 85% or 26 million small businesses have no employees. The Census Bureau calls this category “non-employer” businesses, but the nickname that’s stuck for these one-person ventures is “solopreneur.”

As consumers, we rely on these millions of solopreneurs and small businesses for a vast array of goods and services. Additionally, running your own full- or part-time venture comes with many financial advantages.

In this post, I’ll review seven ways that having a small business saves you money. You’ll learn legitimate, money-saving tax deductions that reduce both business and personal expenses. I’ll also cover tax changes that affect small businesses due to the Tax Cuts and Jobs Act of 2017.

7 Tax Deductions for Small Business Owners

1. Business expenses.
2. Home office expenses.
3. Vehicle expenses.
4. Insurance expenses.
5. Travel and meal expenses.
6. Retirement plan contributions.
7. Qualified business income deduction.

Here’s more detail about each of these money-saving tax deductions for business owners and solopreneurs.

1. Business expenses

There are a variety of deductions you can claim no matter if you’re a solopreneur with no employees, a part-time freelancer, or the owner of a large corporation. Business tax deductions were created to help entrepreneurs manage the costs of running a profitable company.

To be deductible, the IRS says an expense must be both ordinary and necessary for your trade or business. Some common deductions for small businesses and solopreneurs include:

• Employee salaries and benefits (except when you employ yourself)
• Labor paid to independent contractors or freelancers (when payments exceed $600 per year, you’re required to issue Form...

Keep reading on Quick and Dirty Tips