As an independent insurance agent who builds your own business, you may incur some expenses. You could drive a lot between clients, print your own business cards, or use marketing tools to advertise your business. We both know these things are not free. So, to help you keep your costs low, here are 4 business expenses you could be using as tax deductions – plus two bonus ideas!
Mileage (Standard) for Driving Around
If you use your car for your business, you can usually deduct taxes with standard mileage rates for the miles driven during business-related driving. The standard rate was 53.5% in 2017 and 54.5% in 2018. It covers as follows:
- Mileage driven
- Parking fees
- Registration fees
Advertising for the Independent Insurance Agent Isn’t Cheap
Are you printing your own business cards or flyers? Do you pay to use an SNS marketing campaign tool? Did you pay someone to build a website? Do you pay a yearly registration on that website? Since these are related to your business, IRS will likely allow you to take deductions for them. So, save those receipts and claim them!
If You’re A New Independent Insurance Agent, You Likely Have a Home Office
If you have an office that is exclusively used for your business, you may be able to deduct a portion of your home office expenses. There are two ways you can claim office expenses on your next tax return. The first is to take $5 per square foot up to 300 feet, in which case the maximum deduction you can take is $1500. The other method would be to just itemize your home office expenses.
Training and Education for Your Success and/or Compliance
While you cannot deduct your initial licensing exam to become an agent, other learning materials are deductible business expenses if the education helps maintain or improve skills required for your job, or is required by law to maintain your license. You can deduct the following:
- State licenses
- Subscriptions to professional, technical, and trade journals to deal with your business field
Plus, two BONUS ideas for those of you that travel.
Generally, you can take a 50% deduction from your meal expense as long as this meal is related to your business. For example, did you invite an influential figure to lunch to get some advice on how to maximize your business profits? Save that receipt and you can likely deduct 50% of that meal.
You may have to travel to meet your clients or attend a meeting. In addition to the meals consumed or mileage traveled, you can also deduct the expense for accommodation, paid wi-fi in your accommodation, and other business-related expenses incurred during your business trip.
In our experience, there are three big obstacles to the success of an independent insurance agent. Those obstacles are unqualified leads, marketing, and client service. We get it! All these things take time from you. Less time in the field is less time you’re making commissions. Trusted American Insurance Agency provides all of this for you and more without taking from your commission. Join our agency today.