The IRS will begin accepting tax returns soon, which means that if you want to speed up any deductions. So you can return sooner rather than later and reduce your tax burden as much as possible.

You should consider filing your tax return and considering these deductions:

1. Business travel expenses. If you travel for work to attend conferences or meet with clients related to your business, you are generally entitled to deduct all ordinary and necessary expenses you incur, such as transportation, airfare, meals and lodging.
2. Using the vehicle for business. You can deduct the costs associated with running your car if you use it for business purposes. As such, you can use the standard mileage rate, which was 58.5 cents per mile from January to June of this year and then increased to 62.5 cents per mile for the rest of the year, or use the actual cost method. The actual cost method uses the actual costs incurred in operating your car for business purposes, including maintenance, fuel and incidentals.
3. Purchases of large business assets. You can also consider bonus depreciation, which allows businesses to depreciate eligible assets at an accelerated rate. Rather than taking tax deductions for the cost of an asset over its useful life (or to the extent that the asset will be used in the business), bonus depreciation brings forward a larger percentage of the deduction to the tax year in which the business begins using the asset.

Payback

Eligible property is any asset that has a payback period of 20 years or less using the IRS-approved Modified Accelerated Cost Recovery System (MACRS).

This includes assets such as machinery, equipment, computers, appliances, furniture and vehicles.

Before the Tax Cuts and Jobs Act, bonus depreciation was only eligible for new property, but the definition has since been expanded to include certain used property.

Bonus depreciation can now also be written off on qualified improvements to property (QIP).

This means that if a business makes certain improvements to the interior of a commercial building, such as upgrading the wiring or plumbing, replacing interior doors, replacing drywall, etc.

The business may be able to accelerate the depreciation of the total cost of the improvement effort.

Lifts and escalators, property extensions or improvements to the internal structural framework of a building are not included in the QIP definition.
If you use your car for work, whether it’s driving to meetings or making deliveries, you can deduct the mileage on your tax return.

However, if you use the car for personal and business trips, you can only deduct business kilometers.

As with the home office deduction, you have two options when it comes to claiming mileage on your taxes.

The standard mileage rate is a specific rate that you can multiply by the business miles you drive during the year.

For 2022, the standard mileage rate is 58.5 cents per mile through June 30, 2022. If you travel for your business from July 1, 2022 through the end of the year, you can claim 62.5 cents per mile.

Sources: blog.freelancersunion.org | forbes.com