If you’ve had dropshipping explained to you well, then you know just how tempting the idea of starting your own dropshipping business can be. That, plus knowing that the number of online shoppers is expected to increase to nearly 2.5 billion by 2021 and that ecommerce sales are already over $2.29 trillion, gives you a lot of reasons and benefits to starting a dropshipping business of your own.
Despite how (relatively) easy it is to start a dropshipping business and how simple the process of running and operating it can be, you will still have expenses that need to be covered and things that need to be done to make your business run smoothly. Luckily, there are some financial advantages to owning your own business, some of those being tax write-offs, credits, and deductions that can help you build your business up how you need to without spending more money than you’ll be able to earn. Below are some of the top write-offs, credits, and deductions that you may qualify for when you start your own dropshipping business.
Computer, Chair, Paper, and Other Office Supplies
While paper and ink may not be office supply expenses you consider too seriously before making a purchase, other purchases such as a new computer, monitors, or even a new chair can get pricey fast and may cause you to want to hold off on them, even if you’re in desperate need. You can get a break on the office supply purchases you make, though, meaning that instead of struggling with the outdated and uncomfortable stuff you have, you can go ahead and make a new purchase without having to worry too much.
Space You Use to Work in Your Home
Not only can you get a break on the supplies you use to help you run your business, but you may be able to catch a break on the space you use in your home. If you have a home office that you work out of, you may be able to get a break on the square footage that you use. If you have to do a remodel or renovations to give yourself the office space that you need, you may be able to catch a break on that as well.
When you work from home, you will automatically be using some of your utilities for work. Whether you work for one hour or 12, the heat, electricity, Internet, and water you use during that time may be able to be counted on your tax report to give you a break and get some money back from what you spent keeping yourself comfortable and your business running smoothly. You can’t count all of the utilities you use, but even just the bit you use for work can go a long way.
Travel can be expensive, so just like pricey office supplies, you may be trying to avoid it. If there’s a trade show, a conference, or a symposium being held that will benefit you and your business, though, then don’t hesitate to go. Business trips can often get you a break on taxes, so why not go to that trade show and get the info you’re looking for? You may even be able to get away with seeing a few sights (although you might not get a break on those expenses), while you’re gone, giving you a bit of a discount on a business trip/vacation combo.
The Cost of Independent Contractors
As skilled and talented as you may be, running a business is a lot of work, and you may not be able to do it all on your own. Instead of trying to build your own website or install your own shopping cart and hoping your customers won’t run into too many issues, go ahead and spend the money to hire an independent contractor. You’ll get the site and shopping cart you need, but you’ll also be able to get a break on the cost of hiring them when it’s time to file your taxes in the upcoming season.
When you run your own dropshipping business, you can qualify for many financial benefits, including tax breaks on things like new office equipment, the office space you have dedicated in your house, website costs, marketing expenses, and more. Taking advantage of those breaks can help you reduce some of the costs of operating your business, giving you more of the profit and enabling you to get the things that you need without going over budget or putting yourself in too tight of a spot. It’s always a good idea to talk to a tax professional about the breaks you can qualify for to save yourself some money and help you keep your business on the right track.
Did you know that there were so many write-offs, credits, and deductions available for your dropshipping business?