Turn 10% or more of Your Spending into a Tax Deduction
Having a home business can save you money
Two of the Biggest Unite.
Saving Money with a Home Business
I have been asked to share some of the best reasons for starting a home business. I must say up front that I am not a tax pro, I am a business pro. I have my taxes done, like most of us, each year. Over the years, I have learned how to apply some big business style tax deductions to my home business.
Get a Home Business
Any simple search of home-based businesses will reveal many names such as Robert Kiyosaki, Warren Buffett, Anthony Robbins, and even Donald Trump. Here are some great examples of home-based businesses you can start for under $1000:
Home Business Tax Tips
As with any business, deductions are for the "cost of the business". So, just because you have a home based business does not mean you can deduct your whole home. You can, however, dedicate a percentage of your home to the business. An office, desk in the den, or a corner in the living room can be your business headquarters.
We all understand saving receipts for the computer, business cards, phone line, advertising, etc. Most of these are tangible new expenses. There is an all too often overlooked tax benefit, YOUR BUSINESS SPACE. This is where most new home based businesses miss the boat. How much square feet is your business going to take up? If this was an old school brick and mortar store front, then you would have a separate documentation for records. As a home business, you must measure the space.
Now, how much of your home is dedicated to the business? It can vary greatly by what kind of business you are creating. Average is 5-20%. In a large home, an office might only be 5% of the total square footage. But, if your business is doing home parties in the grand room it might be as much as 15% or more of your total square footage. Key note: remember that the space must be dedicated to the business and only the business. Otherwise you have to calculate how much time is business and how much is living and/or recreation.
With all that in mind, how much are your businesses utilities? That's right, your dedicated space includes electricity, heating, air conditioning, janitorial, Internet, etc. Any utilities that your business uses is a legitimate "cost of doing business". So don't forget when you're talking to your tax pro to get every legal dime you can from your home based business.
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