As a small business owner, tax deductions become a key part of saving money and decreasing the amount of taxes you owe each quarter. The benefit of a tax deduction allows business owners to improve their business while receiving tax write-offs on the income their business makes.
Whether you’re upgrading your business or starting a new business, a dumpster rental provides the safe disposal of trash and other materials. When you choose to rent a dumpster for your small business, consider the numerous tax benefits directly associated with the dumpster rental.
Learn how to make the most out of tax benefits and be sure not to miss any potential deductions the next time you file your taxes.
1. Dumpster Rental Deduction
As a small business owner, you already have the ability to deduct the everyday utilities you pay for your business. One of the utility deductions is garbage service. You may already have a smaller dumpster or garbage bin for your waste that gets picked up on a weekly or bi-weekly basis.
Along with your usual garbage services, the money you pay towards a dumpster rental also goes towards a tax deduction. The purpose of dumpster rental is to remove garbage or waste from your business, so the deduction would naturally apply.
The length of time you rent the dumpster for does not matter either. Whether you rent a dumpster for a one day or a couple of weeks, all of the rental fees you pay are eligible for a tax deduction. The deduction applies as long as the dumpster is 100% for your business.
If your business is also your home, you may have to cut the deduction in half. For example, if you use part of the dumpster for business waste and part for household trash, the deduction should be split half-way or at least discussed with a tax professional. Either way, a portion of the dumpster rental costs will be tax deductible.
2. Trash Equipment Purchases
When you rent a dumpster for your business, the dumpster itself may not be all you need to get the job done. Often, you may have to purchase pieces of equipment to help dispose of items. For example, if you have important business documents, you may need a paper shredder.
The paper shredder purchase may be considered a tax deduction as the purchase has been made for business purchases. With the dumpster rental and paper shredder, you have the ability to confidently get rid of documents without worrying about giving away confidential information.
When you dispose of a lot of electronic equipment like computers and laptops, you may consider the purchase of equipment like a hard drive destroyer. The device includes powerful tools to properly destroy the computer equipment so the data can not be recovered.
This equipment is also tax deductible and will serve your business anytime electronic equipment updated and older equipment needs to be destroyed.
If you purchase equipment you plan to purchase for years after the dumpster rental project completes, then the deduction may fall under a depreciation deduction. Each year, your business will deduct a percentage of the total value of the item. The actual amount and percentage varies and depends on how valuable the equipment is.
Save receipts for all the items you purchase to use with your disposal. Once you file your taxes, all of the little expenses will really add up for some big deductions. A tax professional or tax software will guide you through the depreciation process to ensure you get the most out of your small business tax deduction.
3. Trash Equipment Rentals
Along with purchases like a paper shredder, consider the use of other tax deductible items that you may rent for use with the dumpster. For example, for any business improvement projects, you may need to rent advanced tools. A large tool like a sledgehammer could be used to break down wood or stone for proper dumpster disposal.
Other than your renovation project, a sledgehammer may not be needed at your business, so a rental will be more cost-effective than a full purchase. The rental aspect of the purchase will still be tax deductible, often filed under the equipment deductions for your business.
You have numerous types of equipment rentals to out with the dumpster. If your business clears out a wooded area, you may rent a wood chipper to help break down big branches and save space within the dumpster.
Tax deductions go a long way in helping your business thrive and save money on hefty tax payments. Always remember to contact professionals with any tax questions you have to ensure your taxes and deductions are filed correctly.
For more information on dumpster rentals, contact us at Tri-State Disposal. We have all kinds of dumpsters available and will help you get through all your disposal needs.