Small Business Owner and Entrepreneurial Tax Breaks You Should Know About

The U.S. tax code is constructed in a way that favors entrepreneurship, for the purpose of encouraging small business growth. When you become your own boss, especially through franchise ownership, you’re entitled to several key tax deductions and write-offs that lower your overall tax liability. Some of these deductions will sound familiar to you – especially if you’ve got any friends or family who currently own a business of their own. But many of the additional tax breaks seem to be custom designed to benefit franchise owners in particular.

If and when you decide to investigate the entrepreneurial life, here are just a few tax deductions that you can write off as a small business owner. Just make sure you maintain good records and keep all of your business expense-related receipts!

Startup Costs

When you become a franchise owner, your tax liability begins to lessen before you even open your doors. Because according to the tax code, you can deduct up to $5,000 in expenses for startup-related costs. Travel and training are included, so your introductory sessions at the franchisor’s headquarters would be at the top of the list. You can also claim costs related to advertising and promotion (Hello, Grand Opening!). And you can also deduct any fees paid to business consultants, attorneys, and accountants – all of which you likely incurred while reviewing the brand’s FDD.

Brick-and-Mortar Write-Offs

If you’re franchise requires a physical establishment, there are multiple tax deductions you can claim. These benefits extend to your lease-related rent payments and associated costs, as well as your common utilities and maintenance upkeep. Your property insurance payments are deductible, as well as any costs related to maintaining an inventory of products.

Home Office Tax Breaks

Many of Franchise FastLane’s best-in-class brands don’t require a brick-and-mortar storefront. That leaves both mobile and home-based business concepts, which come with their own set of tax deductions. These include furniture, equipment, software purchases, and office supplies. Best of all, if you do work from your own residence, you can even deduct the tax value based on the square footage you designate as your home office.

Mobile-Based Tax Breaks

If you own one of Franchise FastLane’s mobile-based concepts, you can claim a full list of tax deductions related to your company owned vehicle. This includes the purchase of your vehicle, any mileage accrued, tolls, maintenance, and even your insurance payments. Perhaps now you have a better understanding of what “living the van life” really means!

Advertising, Marketing, and Promotional Costs

Any money that franchise owners spend to raise their brand awareness can be claimed as a tax deduction. Some examples include billboards, digital ads, direct mailers, market research, printing costs, promotional swag, and radio and television spots. One other item? Your website domain registration and annual renewal fees.

As you can see, there are plenty of tax deductions available to small business owners – especially franchisees. As a business owner, if you don’t take advantage of the tax breaks afforded to you, it’s the same as leaving money on the table. Of course, with anything tax-related, you’ll want to make sure you’re in compliance with all state and federal tax laws, so make it a point to check with your accountant of CPA regarding any of the aforementioned deductions.

Ready to Explore Franchise Ownership? Let’s Connect!

If you’d like to explore what’s possible through franchise ownership, we invite you to reach out to Franchise FastLane to learn about the 20+ best-in-class brands in our portfolio of opportunities. Our staff has built and cultivated a reputation for helping franchise ownership candidates discover a path that can lead to a whole new way of life. Once you enlist our assistance, we can help you turn your business ownership dreams into reality.