Mileage: Most of us already know that we can deduct a mileage allowance from our taxes. However, many of us do not bother to keep track of our travels thinking it will not be worth the trouble. Think again! Business use of an owner’s personal car can be deducted using the IRS standard mileage rate of 44.5 cents per mile in 2006. By traveling just 100 miles per month, you can claim $445 dollars!

Bad Debt: Did you sell products or services to someone who did not pay you? Have you tried to collect the money without success? You may be able to write those losses off and get a deduction for them. Of course it will not equal the total amount you lost, but it is better than nothing. Simply gather the information and documentation about the sale and your attempts to collect and provide them to your CPA. You do not have to file bad debt deductions in the same year they occurred, so if you have old losses, gather the information now so you can include it on your current return.

Section 179: One of the most powerful and lucrative annual deductions is the Section 179 depreciation deduction. It provides a way for small businesses to instantly deduct up to $108,000 worth of new and pre-owned equipment in the year it is first placed in service – — including vehicles and computers. The $100,000 (plus inflation adjustments) allowance is for tax years 2003 through 2007. Without it, you would have to depreciate most business equipment over five to seven years.

Home Office Deductions: Claiming the use of your home as an office can be a slippery slope. Assuming you have already met the IRS criteria for doing so, consider these other home office related expenses: mortgage interest, insurance, utilities, real estate taxes, casualty losses, depreciation, security systems, and repairs. More information about home office deductions can be found at: www.irs.gov/newsroom/article/0,,id=108138,00.html. Work with a professional to determine your deductibles.

Telephone Excise Tax Refund: This year there is a little known small tax credit available to virtually EVERYONE for an excise tax charged by the federal government on our past telephone bills for long-distance service. This is a dollar-for-dollar reduction of taxes! To request a refund, businesses must complete Form 8913, Credit for Federal Telephone Excise Tax Paid (www.irs.gov/newsroom/article/0,,id=164310,00.html).

Businesses may determine the actual amount of refundable long-distance telephone excise taxes they paid for the 41 months from March 2003 through July 2006, or use the formula to figure their refunds. The refund is capped at 2 percent of the total telephone expenses for businesses with 250 or fewer employees — which covers more than 99 percent of all businesses.

When you are totaling up your business’s expenses at the end of the year also remember these common business deductions: start up expenses, education expenses, legal and professional fees, business entertaining, software, charitable contributions and advertising and promotion. The content of this article is not intended to be a legal interpretation of IRS codes and, circumstances vary from one business to the next, so remember to check with your qualified tax advisor to find out which deductions you may take. For specific information about business deductions, please refer to these sites:  www.irs.gov/businesses/index.html, and www.sba.gov/smallbusinessplanner/manage/paytaxes/index.html.

(Editor’s Note: Wendy Miles, Director of Customized Training and Military Education at Olympic College, oversees the operation of the Kitsap Business Assistance Center (KBAC). For partnership opportunities, contact Ms. Milehers at 360-475-7786. For KBAC counseling services and workshops contact Rand Riedrich at 360-307-4220, rriedrich@oc.ctc.edu.).