While exact numbers for Washington State aren’t published, national data suggests many small business owners frequently miss out on deductions they’re entitled to claim.
Why Deductions Are Missed
- Complex Rules: IRS deduction rules can be confusing, especially for newer business owners.
- Poor Record-Keeping: Without receipts or mileage logs, eligible deductions often go unclaimed.
- Audit Fear: Some owners avoid deductions like meals, vehicle use, or home office, thinking they’re red flags.
- Lack of Awareness: Many aren’t familiar with all deductions and credits, such as the Qualified Business Income (QBI) deduction.
Washington State-Specific Notes
Washington’s Business & Occupation (B&O) tax doesn’t allow most expense deductions. This means even properly claimed federal deductions won’t reduce your state B&O tax liability unless specifically exempted.
Tips to Avoid Missing Deductions
- Keep organized records year-round, including digital receipts and mileage logs.
- Consult with a tax professional familiar with both federal and Washington state tax law.
- Learn which deductions apply to your specific business structure.
- Review your tax situation annually to take advantage of new deductions or credits.
Missing deductions may not trigger an audit, but they can cost business owners thousands in overpaid taxes. Staying informed and organized is key to maximizing your tax savings, contact us today to start getting all the business tax deductions you can.
Have questions? (206) 838-3800 — info@ygacpa.com
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