Business owners with an LLC business structure are always looking for new and different ways to get back any amount of money they can get back.

LLC business structure does have many benefits when it comes to segregating personal and business liabilities and benefits. However, business owners also often use LLC structures to follow this incorporation structure to pass through tax liabilities. Yes, this might come to many as a surprise. However, using an LLC business structure for one’s business has many tax benefits.

By claiming more deductible taxes, you will have fewer taxes to pay. So, if you have an LLC business and want to learn more about LLC tax write-offs, go through this article.

Common Types Of Tax Write Offs For LLC  

If you are operating a single-member LLC and filing as a single member ( or married but filing separately), then your standard tax deduction will be $13,850. Many business owners can save substantial amounts by filing itemized deductions.

In most cases, itemized deductions can help business owners save more on taxes than standardized tax deductions for LLC business owners. Go through the different common types of tax write-offs for LLCs below –

1. Auto Expenses   

Are you running an LLC and wondering whether there is a tax write-off for LLCs for their cars? If yes, we have good news for you. Business owners often use their cars for deliveries or their meetings. They can now write off their tax expenses through one of the two methods the IRS allows.

Also, there are common misconceptions among LLC taxpayers that the ‘auto expenses’ only have mileage for tax write-offs. But that is not true. Entrepreneurs can include oil, fuel, repairs, insurance, and maintenance of their cars to auto expenses.

Actual Expense Method

The actual expense method works a little differently. For this method, you must add up all vehicle expenses during a financial year. Then, you have to divide the expense by the percentage of time the vehicle was used for the business.

Standard Mileage Rate

The second method among them is the standard mileage rate. This method requires the entrepreneur to remember to keep personal and business mileage during the tax year. For 2023, the standard mileage rate is 65.5 cents per mile for businesses.

2. Start Up Costs  

Many new entrepreneurs with an LLC business structure often do not know that they have tax write-offs on startup costs. Yes, tax write offs for LLC startup costs can help you save considerably. There are options for amortizing or deducting your startup costs when you have a business ready and running.

3. Professional And Legal Fees  

Budding entrepreneurs have different ways of getting tax write offs for LLCs. Legal and professional fees are one of the expenses that provide an opportunity for tax write-offs on startups.

4. Business Insurance  

How about getting tax write offs for LLC on the business insurance? That’s two birds with one stone. Not only are you doing smart business by getting your business insured, but you are also getting tax write-offs on your insurance costs. However, if you are getting this tax write-off benefit for your LLC, make sure that none of your personal insurance costs are included there.

5. Business Travel  

You can also claim LLC tax write-offs for valid and necessary business trips. Your business trip must be more than a working day to claim a tax write-off on this expense.

6. Interest Payment  

Businesses usually take loans to fund their capital investment or run any business operation. This means that the entrepreneurs can deduct the interest cost from their taxes.

7. Depreciation On Equipment  

Bonus depreciation on some of the eligible assets allows business owners to write off a massive cost over a useful life. If you have a manufacturing business with an LLC structure, you can get tax write offs for LLC through bonus depreciation.

Also, immediate deductions are applicable to some of the eligible business equipment. This is called the Section 179 deduction according to the US Internal Revenue Code.

With the de minimus safe harbor election, a business owner can instantly expense assets and some specific repairs up to $2,500. Also, there is a raise for reporting companies or for companies with financial statements audited by CPA. For a starting LLC company, that is a good tax write-off.

8. Tax & License   

There is a massive LLC tax loophole hidden in the real estate taxes. You have a massive $10,000 property tax write-off eligibility as an LLC business. The professional licenses can also be eligible as business expenses. LLCs that provide professionally licensed services can add the cost of maintaining and obtaining the licenses for taxes.

9. Expense On Education  

It is difficult to run a small business without learning about what is happening in the world around them. They must stay updated with the latest news, trends, and more. So, there are necessary educational expenses like seminars, workshops, conferences, and even formal education connected to your industry.  

You can claim tax write offs for LLCs if the education taken pertains to your particular industry.  

10. Promotion & Advertisement Cost  

When you are jumpstarting your business and getting your business story out there, there is a chance of spending some amount on advertising. Creating the advertising materials requires some costs. Some common promotional materials include creating flyers, business cards, websites, banners, and skywriting. The advertisement and promotional costs for an LLC are eligible for tax write-offs.

Additional LLC Tax Write-Offs  

Aside from the ones mentioned above, there are many business expenses under LLC business structures that can potentially offer tax write-offs. Some common examples would be salaries and different benefits. You can be smart about your business expenses and claim tax write-offs on many expenses.  

These are usually some of the often-missed business expenditures. Some of them would include personal tax deductions like dependent care, retirement contributions, and expenses related to health care. However, before you decide or act on anything, I suggest discussing it with your tax/financial advisor. Hopefully, this article was helpful.

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