Whether you’re a real estate agent or medical sales representative, working in sales has a considerable number of benefits. With limitless earning potential and a broad network of career opportunities, a sales professional remains a rewarding career choice regardless of where you live.
Perhaps one of the greatest perks to this profession is the wide variety of deductible expenses at your disposal. In contrast to W-2 workers, sales professionals are often considered self-employed. This means, they qualify for some of the biggest tax write-offs available when filing their income taxes.
So, what are some ways to save money on your taxes?
At MileIQ, we repeatedly get asked ‘What can I deduct as a sales professional? by those looking to find additional deductions to reduce their taxes on their federal returns. To help clear up any confusion, we’ve compiled a list specifically designed for sales professionals that includes the top five ways to save money on your taxes.
Let’s get started!
In general, sales professionals spend a majority of their time on the move. From business trips with clients to week-long conventions, the role of a sales professional often requires significant flexibility when it comes to scheduling. As you might expect, travel expenses happen to be the most commonly claimed deductions year after year. While taxi fares and plane flights normally take up the bulk of these expenses, there are other ordinary and necessary business-related expenses to consider when making a plan for how to save money on taxes:
While travel expenses are deductible, it’s important to note that the IRS imposes restrictions on when and how much you can actually write-off. For instance, you must travel outside your tax home’s city limits to have any business expenses qualify as a deduction, allowing you to save money on taxes.
In order to stay up-to-date with industry trends, a sales professional is typically required to have all the latest tools and equipment on hand. This includes computers and tablets, laptop accessories, software programs, and other necessary materials to perform your job efficiently. When it comes to taxes, however, you’ll be glad to know that most of these expenses are deductible, allowing you to reduce your future tax bill when you invest in tools that support your work.
Make sure to keep records and receipts of all your tool and equipment purchases to maximize your next tax return. In addition, you can opt to write-off any software program or education course that contributes to your career and save money on taxes for those services as well.
Do you work from home on occasion? If so, the home office deduction is a great way to maximize your yearly savings as a sales professional. According to the IRS, you can claim home office expenses and save money on taxes if you meet the following two requirements:
When tax season arrives, you have two options for calculating these business costs — the regular method or simplified option. Each takes into account the amount of space that is used “exclusively and regularly” for business purposes.
To learn more about the home office deduction and see if you’re eligible, read our home office tax deduction guide here.
Apart from traveling, sales professionals often spend a large quantity of their time on the phone. Whether this involves arranging meetings or cold calling potential new clients, your mobile phone remains a valuable resource to your work life. Luckily, sales professionals can save money on taxes by deducting these costs by claiming a percentage of their phone bill on their next tax return.
Did you know sales professionals qualify for the mileage deduction? This means you have a huge opportunity to slash your tax bill and maximize your savings each year through accurate mileage logging. All you need to do is sign up for MileIQ and enjoy the ease and utility of automatic mileage tracking. As you drive to your next business meeting, the MileIQ app will run in the background of your smartphone and contemporaneously log all your business miles.
With six thousand 5-star ratings across Apple App Store and Google Play, it's no wonder why thousands of sales professionals rely on MileIQ for their mileage tracking needs. One MileIQ user remarked, “[MileIQ is] SO convenient. I love that I don’t have to remember to log my drives, and that categorizing them is as easy as a single swipe. This is a gamechanger!”.
Even tax professionals approve. “I recommend it to all my clients so they are IRS ready in case there is a question,” — mentioned by a CPA. With the backing of tax professionals and millions of business owners and sales professionals alike, MileIQ remains the premier choice for putting money back in your pocket each year.
Bottom line: If you’re a sales professional and want to know the best way to save money on your taxes, consider MileIQ your best bet.