Working as a contractor in Arizona requires you to be on the ball as tax season approaches. It is very important that you are aware of the income you can potentially be taxed for as well as tax deductions that you are entitled to. There are some things that should be written off each year on a regular basis. Here are the top 3 things you should always write off your taxes as a contractor in Arizona:
1. Transportation Costs
Whether you work from home or in an office, the mileage from all of the traveling you do can be and should be deducted each year from your taxes. This includes traveling from your office to a client’s office, running to and from the bank, buying business supplies, running errands and even going to the post office. Do your best to track your mileage so you can give an accurate mileage report at the time you file your taxes. It might be worth keeping a log in your vehicle so you have pertinent information. Keep in mind that costs for parking is also deductible.
2. Per Diems
As you travel from one worksite to the next or from your office to another, be sure to keep track of any meals that may take place along the way. According to IRS codes, per diem costs can be deducted from the total taxable amount due. Not only should you keep track of your own meals, but also any meals that you provide for clients. It is also crucial that you are logging any expenses that include overnight lodging. These type of expenses are deductible.
3. Tools and Supplies
As a contractor, you are constantly buying supplies and tools to complete the various projects you are involved in. These tools and supplies are considered as a business expense and can be deducted. Everything and anything you use that relates to your business can be deducted. This can include the cost of ink for the printer and even stamps used to mail invoices.
These are just 3 of several important deductions you can make when filing your taxes. To be sure you are filing your taxes in the most advantageous manner, be sure to work with an experienced accounting firm such as Hacker Accounting. We have worked with hundreds of contractors in the past and are well aware of what can be counted as a deduction.
Call us today at 602-375-5251.