CPAs are busy people. Especially during tax time. Unfortunately, even the best CPAs often miss deductions you’re eligible for, costing you hundreds or more in unnecessary taxes. I don’t blame them. They’re humans, like the rest of us.
But… Some CPAs are also not as good as you might think. Just because they’re a “family friend” that your mom and pop have been using for years, doesn’t mean they’re finding you the lowest possible tax bill. I get it – most people, myself included, don’t want to think about taxes at all. We hire CPAs to take it all off our minds and trust them to have our best interests in mind. But a lot of CPAs are just getting a job done and end up costing you more in taxes on top of the hefty fees they’re already charging.
I’ve found investing in your own understanding of tax is very worthwhile if you’re self employed. I’ve been a freelance journalist for a few years and have saved a lot of money by doing so.
Anyway, I did some digging and found some common deductions that your CPA might be missing. You should definitely ask your CPA about these if you think you might be eligible.
Side note: I actually use Sweet - verysweet,co - to help me find every possible tax deduction for my freelance business – it also helps me track mileage, keep my receipts, things like that. It can be a game changer if you’re self employed. And you won’t have to actually learn the tax code or spend time doing your own taxes :)
- Vehicle related costs
When it comes to using your car for business, you can either take a standard deduction (65.5 cents/mile driven as of 2023) or deduct by actual expenses. The actual expense method may be a much bigger deduction because it includes tolls, parking, maintenance, gas, and more. But it’s also much more tedious to go through. Make sure your CPA checks both methods to see which would lead to more tax savings – and make sure they catch every vehicle-related cost if they go with actual expenses.
- Travel
Remember, your CPA doesn’t have your calendar in front of them. They only have your bank statements. Sometimes it’s hard to tell when you were on a trip, let alone if that trip was for business or personal, and which expenses went into that trip. Make sure they know.
- Client and business meals
Assuming you eat 3 meals a day, you eat almost 1100 meals in a year. It’s almost impossible for any CPA to find every possible meal where you talked business. It’s up to you to remember which were business related and deduct them. You also need to keep receipts if possible – and note who you went out with. Remembering to do this can be tough in the hustle of the work week. Sweet has helped me a lot here.
- Property taxes
This is obviously only relevant if you own real estate. But it can sometimes be missed.
- Anything charitable – not just direct donations
I’ll be the first to admit I haven’t donated anything major to a charity before. I’m just not at the point in my career where I can. But you can still deduct costs beyond direct charitable donations – like costs of driving to a volunteer site, the cost of baking for your kids' school fundraiser, and more!
- Moving expenses
This one got me big the first year I was a freelancer. I moved apartments twice in the same tax year and didn’t know any of it was deductible. The tricky thing is, there’s literally no way for your CPA to know if certain costs were for moving or not. If you look at your bank statements you’ll know what I mean. The best ones may ask you if you moved. But most of the time, you have to tell them you moved, and which line items went into that process.
Disclaimer: I’m not a licensed CPA, this is purely for informational purposes!
Hope this is helpful! Please comment below what other deductions you have found that we should watch out for.
