A tax deduction (tax write-off) is an expense that a business owner is entitled to subtract from their gross income, resulting in lowering their taxable income (the amount on which they are taxed on.)

There are three types of deductions in tax return: personal, business and investment deductions. Business deductions are based on expenses that are spent to run the business. The IRS taxes on profit, not on gross income. The key point here is that the more you deduct, the lower your profit (taxable income) will be. The important rule here is all deductions should be done within the legal limitations. All tax deductions should be supported by records or documents.

Types of Deductions

Start-up expenses

Business operating expenses

Car Expenses

Business  travel expenses

Meal and entertainment expenses

Home office business

Long-term assets deduction

Retirement plan deduction

Medical expenses

Advertising expenses

Education expenses

Other deductions

People who want to start a new business should consider these important factors to decide which business form is the right one for them.

Legal protection (Legal liability) - Am I willing to take a risk of my personal assets with a new business?

Tax implications - How can I minimize income tax?

Start-up costs and maintenance - How much do I want to pay? How much administration will it need? How much will it cost every year to keep the business?

I narrowed it down to LLC or S corporation.  Even though my accountant suggested that I go for S corporation, I think I should choose LLC hoping the business will grow soon.

But  my accountant advised me to form a S corporations instead.

The Biggest advantage of S corporation is that I can avoid double taxation.