ST: What are some common deductions salon owners miss?
Kopsa: “Here are a few:
• Mileage: At 55.5 cents per mile, make sure you are recording all of your business miles. If the primary purpose is for business, even if there is some non-business activity in the trip, you can deduct it.
• Damaged clothing: Stylists work around chemicals which can be hard on clothes, and the value of clothing damaged at work can be deducted.
• Office in the home: Understanding all the offi ce-in-the-home rules to determine if you might qualify.
• The percentage of meals: Most meals and entertainment are only 50 percent deductible, but if the meal is for a company party or meeting function for clients, it can be 100 percent deductible.
• Being taxed in the wrong form of business: As your business grows you need to reevaluate to determine if you are being taxed in the proper entity.
• Using family members as a write off: Often family members help around the business. Paying them reasonable compensation can move money to a lower tax bracket.”
For more information visit kopsaotte.com or call 402-362-6636. Catch Larry Kopsa’s blog at kopsaottesalon.blogspot.com.