Many small businesses are scrambling this month to meet the annual tax deadlines. And this year, the recession has made the job even more difficult. In fact, this is the time of year when many small businesses resort to accounts receivable factoring, in order to pull together the funds to pay their taxes.

The more tax deductions your business can legitimately take, the lower its taxable profit will be, but business owners need to be very careful about the IRS rules on what business expenses are deductible.

Following are some of the more common business deductions:

1) Expenses that go into running the business including rent, utilities, advertising, office supplies, and other miscellaneous items are considered current business expenses.
2) Automobile expenses if your car is used for business or if your business has a vehicle.
3) Equipment can be written off by most small businesses, who can write off the full cost of some assets in the year they buy them, rather than deducting their cost over a number of years, or capitalizing them.
4) Legal and professional fees paid to tax professionals, consultants or lawyers are generally deducted in the year incurred.
5) Educational expenses, if they are related to your current business, occupation or trade, may be deducted just as long as the education is intended to improve or maintain your skills.
6) Bad Debt – depending on the kind of product your business sells. For example, you may deduct the cost of goods sold but never paid for, but not services. Deductions are not allowed for time you devoted to a customer who did not pay.
7) Entertaining, as related to current or prospective customers, may deduct 50 percent of the cost if it is directly related to the business or if it is associated with the business, and the entertainment takes place before or after a discussion about business.
Travel as related to business offers many deductions for expenses, such as the cost of plane fare, taxis, lodging, operating your car, meals, shipping business materials, cleaning clothes, telephone calls, faxes, tips and more.
10) Charitable contributions (old used computers, equipment, furniture, etc.) can be a tax deduction IF your business is a partnership, a limited liability company, or an S corporation (a corporation that has chosen to be taxed like a partnership), your business can make a charitable contribution and pass the deduction through to you.
11) Real estate property can be used as a deductible, along with repairs or maintenance.

Small to mid-size companies that apply for a bank loan are turned down. If you find that you do not have enough money to cover this year’s taxes, think about accounts receivable factoring, in order to collect the funds and pay your taxes on time. Factoring is one of the oldest financial methods. Whereas banks typically require collateral from a business before they are approved for a loan, factoring happens fast, and in fact, often as little as 24 to 48 hours.