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Did you know about the Tax advantages of owing a home based business?

  1. IncomePowerBoost profile image57
    IncomePowerBoostposted 7 years ago

    This is one of the mail reasons to open a home base business.  You could save 30-50% on what you are currently paying.  Search small business tax deductions in goggle to find out more. If you plan on opening some sort of home base business I would recommend that you seek the counsel of a CGA in your area to get the full benefit from it and protect yourself form being audited by whatever agency is in your area

    1. davidseeger profile image61
      davidseegerposted 7 years agoin reply to this

      As opposed to what other type of business? There has to be income before you can talk about tax advantages. You can't talk about improvements until you have a base by which to measure the improvements.

  2. businesstrader profile image39
    businesstraderposted 7 years ago

    I agree with davidseeger. Without an income this is not applicable, but in the cases where there is an income, then I would imagine this information would be highly valuable and interesting to many business owners.

  3. cornwall_UK profile image86
    cornwall_UKposted 7 years ago

    In the UK, the amount of tax advantage you can gain is proportionate to the amount of space you're taking up - and for how many hours.  Also, you have to think about whether claiming tax will mean you have to pay Capital Gains Tax when you sell the house.

    An example of a tax deduction that might be allowed is:

    You have a small room that you use for 6 hours/day, 4 days/week for your business.  The floorspace of the room is 1/10th of your total house floor area.

    Your electricity bill for the month is £100.

    Your tax advantage might be (accountant would need to check/confirm):

    £100 / 10 (space the room occupies) = £10
    £10/730 (hours in a month) = £0.0137
    £0.0137*104 (hours you use the room/month) = £1.43

    And you'd not pay tax on £1.43, which would mean a tax saving, per month of £0.28-£0.56

    It's not really that exciting is it smile

    OK, there's also heating etc, but in the UK if you're using a room part of the time, it's negligible.

    1. Pcunix profile image90
      Pcunixposted 7 years agoin reply to this

      It is basically the same in the US.  Deductions for a home office is proportional and really doesn't amount to much, and you do have to consider the consequences when selling.