7 minute read
As a small business owner, maximizing your tax deductions is crucial for minimizing your tax liability and boosting your bottom line. While many general business deductions apply across industries, there are also numerous industry-specific deductions that you may be overlooking. In this comprehensive guide, we’ll explore valuable tax-saving opportunities tailored to different business sectors and show you how Corvee’s advanced tax planning software can help you identify and leverage these deductions.
Every industry has its unique characteristics, challenges, and opportunities. Recognizing this, the tax code includes provisions that cater to specific business sectors. By understanding and utilizing these industry-specific deductions, you can:
However, navigating these specialized deductions can be complex. That’s where Corvee’s tax planning software comes in, offering powerful tools to help you identify and maximize industry-specific tax savings.
If you’re in the manufacturing or distribution sector, consider these industry-specific deductions:
Research and Development (R&D) Tax Credit
The R&D tax credit is a valuable incentive for manufacturers who invest in innovation. It applies to:
Corvee’s software can help you track and document R&D expenses, ensuring you maximize this credit.
Section 179 Deduction for Equipment
Manufacturers can take advantage of Section 179 to deduct the full purchase price of qualifying equipment in the year it’s placed in service. This includes:
Corvee’s multi-entity tax planning features can help you optimize equipment purchases across different business entities for maximum tax benefit.
Inventory Valuation Methods
Choosing the right inventory valuation method can significantly impact your tax liability. Options include:
Corvee’s software can model different scenarios to help you select the most advantageous method for your business.
For tech companies and software developers, consider these deductions:
Software Development Costs
You may be able to deduct or amortize costs associated with developing software for internal use or sale. This includes:
Qualified Business Income (QBI) Deduction
Many tech businesses structured as pass-through entities can benefit from the QBI deduction, which allows for a deduction of up to 20% of qualified business income.
Corvee’s federal tax planning tools can help you navigate the complexities of the QBI deduction and maximize your savings.
Startup Costs
Tech startups can deduct up to $5,000 in startup costs in the first year of business, with additional costs amortized over 15 years.
Real estate and construction businesses have several industry-specific deductions to consider:
Cost Segregation Studies
A cost segregation study can accelerate depreciation deductions by identifying building components that can be classified as personal property or land improvements, which have shorter depreciation periods.
Energy-Efficient Commercial Building Deduction (Section 179D)
Businesses can deduct up to $1.88 per square foot for installing energy-efficient systems in commercial buildings, including:
Like-Kind Exchanges (Section 1031)
Real estate investors can defer capital gains taxes by exchanging one investment property for another of like kind.
Corvee’s state and local tax planning features can help you navigate the complexities of like-kind exchanges across different jurisdictions.
Healthcare providers and medical practices should be aware of these deductions:
Medical Supplies and Equipment
Deduct the cost of medical supplies, equipment, and diagnostic devices used in your practice.
Continuing Medical Education
Expenses related to maintaining or improving professional skills, including conference fees, travel, and educational materials, are deductible.
Electronic Health Record (EHR) Systems
Costs associated with implementing and maintaining EHR systems may be deductible or eligible for depreciation.
Professional service firms can benefit from these deductions:
Home Office Deduction
If you use a portion of your home exclusively for business, you may be eligible for the home office deduction. This can include a percentage of:
Professional Liability Insurance
Premiums paid for professional liability (malpractice) insurance are fully deductible.
Business Development Expenses
Costs associated with acquiring or retaining clients, such as marketing, advertising, and networking events, are deductible.
Scan client returns. Uncover savings. Export a professional tax plan. All in minutes.
Retailers and e-commerce businesses should consider these deductions:
Inventory Shrinkage
Deduct the cost of inventory lost due to theft, damage, or obsolescence.
Point-of-Sale (POS) Systems
The cost of POS systems, including hardware and software, can be deducted or depreciated.
Website Development and Maintenance
Expenses related to developing, hosting, and maintaining your e-commerce website are deductible.
Identifying and leveraging industry-specific tax deductions requires in-depth knowledge of tax laws and careful planning. Corvee’s advanced tax planning software offers several key advantages:
While maximizing deductions is crucial, it’s equally important to ensure compliance with tax laws. Corvee’s tax planning software helps you:
Understanding and leveraging industry-specific tax deductions is a powerful way to reduce your tax liability and boost your business’s financial health. By using Corvee’s advanced tax planning software, you can navigate the complexities of industry-specific deductions with confidence, ensuring you’re maximizing every available tax-saving opportunity.
Remember, effective tax planning is an ongoing process. Regularly review and adjust your strategies as your business evolves and tax laws change. With Corvee’s powerful tools and expert support, you’ll be well-equipped to optimize your tax strategy and drive your business’s financial success.
Ready to unlock the full potential of industry-specific tax deductions for your small business? Get a free demo. Explore Corvee’s tax planning software and discover how to maximize tax savings while ensuring compliance. With Corvee, you’ll have the tools and expertise needed to navigate complex tax scenarios, provide data-driven advice, and help your business thrive in today’s competitive landscape.
See how Corvee allows your firm to break free of the tax prep cycle and begin making the profits you deserve.
Please fill out the form below.
Fill out the form below, and we’ll be in touch.
Please fill out the form below.
Please fill out the form below.
Please fill out the form below.