5 Top Food Business tax deductions for your small business
For all of you out there who are interested in setting up your own food business, a restaurant or a cafe or any eatery maybe? This article offers information about five tax deductions that you need to be aware of before you set up your business.
The mentioned tax deductions are not in order of importance, let's say most important to least important or anything of the similar sort, They are equally important and have a significant role to pay when it comes to the tax deduction.
- Food Costs: Food costs makes up around 40 percent of your total annual budget. Food cost is the most fundamental of any eatery. Even though it is also the biggest expense of an eatery, you would want to keep track of it. Always make sure to keep the receipts with yourself whenever you purchase food items from any vendor, retailer, supply company or even wholesale company. It is very basic information but an essential one for those of you who are new to this business or are planning to get into this business. Whatever you buy that will be used in the final food dish as an ‘ingredient’, you will be accounted for it. Hence, it is very important to keep all your invoices or receipts safe with you.
- Cost of Labor: If you are running an eatery, then you probably will be having some professional help in the form of employees. So, if you have employees that means you are paying them something. Wages or benefits. The cost of employees is fully deductible because that is an expense to operate your business. This will also include the cost of food for the employees. In addition to these, you will be accounted for any other expenses when it comes to employees.
- Small Ware: Apparatuses or utensils which are used for smaller quantities of food items such as sugar or powdered sugar, are called small ware. The money which goes into buying these apparatuses is also one of the expenses that you must keep track of. Small ware also includes any appliances which are meant to deal with smaller quantities. All the items which cost around $500 or less are accounted for as small ware. Anything above $500 will not be covered under small ware and will have a different accounting method.
- The cost of all the linen that you use in your restaurant will be counted. The napkins, aprons, tablecloths or any other linen will also be included. The cost of getting all the linens cleaned, if you are not using paper napkins, will be counted as an expense.
- Insurance will be the last expense. When you are running a business, you need to have insurance to keep your business protected. There are different types of insurances to keep you covered under different circumstances. Let's say if anyone gets hurt within the restaurant premises, or maybe you had a fall or maybe someone else slipped and fell. You need to be prepared for all such incidents. Apart from these, there is property insurance which is absolutely necessary to protect your property against any damages.
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