If you are currently someone’s employee and don’t own a home based business, make it your business to find one, running a home business is the best way to get some of those needed tax advantages. Whether it’s the latest yummy shakes, juicy juice, or anti-aging youth serum, get involved in a home business of your own. On average it can save you $500-$700 or more with the new tax changes on the horizon.
Once you’ve decide that creating a business is for you, there are many things that are involved that must be taken seriously. There are a myriad of expenses associated with running a home business, but the good news is, many of them are tax-deductible. This article highlights several things that you will be able to write off when April 15th rolls around.
First off let me just reiterate, if you have a home based business, you must designate a separate area used solely for business purposes. If ever you get audited by the IRS, you’ll need to prove that you have this space laid out for your company affairs. That being said, when you have to purchase office supplies for your new company, you will be qualified to write these items off. It may not be sensible to write off every single marker, pen or paper clip, but items like fax machines, copiers, and business software should definitely be included. The key is to only write off things that are used solely for business purposes.
There are magazines out there created for the sole purpose of educating you about your trade. In order to succeed in your business, you may need to read a few if you want to keep up with what is going on in your industry. While the Internet has a lot of information, it would not hurt you to subscribe to a few of these trade magazines. If the magazines you purchased satisfy a genuine need for you to run your business effectively, then guess what? These subscriptions can be written off as well.
Your Phone Bill
If you are in any type of business you are well aware of how important your phone is. Without it, your business will never get off the ground. Although you cannot write off your entire bill from your taxes, you can write off your service if it is a dedicated business line. If you have added a second phone line to your account to be used for business only, which is highly recommended, that is deductible.
Can you ever imagine a time where people actually performed business affairs without the world wide web? Thank goodness for technology! The Internet is another expense that can be written off if you use it for business alone. Now, if you spend countless hours shopping online and only one hour doing business related work on it, then please don’t attempt to deduct that. If on the other hand, you have a laptop that you use for business purposes (including Social Media Marketing), and not for any personal reasons, it’s perfectly ok to add your online usage as a business expense.
Have a tangible product that you sell as part of your business? Then you are allowed to deduct any money that you use in order to ship your products to people. However, if you only use shipping services every once in a while, it will not make much of a difference on your tax deductions, but if you use it quite often, the ability to write it off can save you a ton of money. Keep all of the receipts you give from making shipments and any other related cost you may incur in the process.
Many people make the mistake of forgetting to deduct mileage when they file their tax returns. If you use your car for anything that relates to your business, for example, dinner meetings, product deliveries, and even some recreational events as long as your business is somewhere in the topic of your conversation, you can deduct it.
You’d be surprised at how many things you can actually deduct from your tax returns that can save you a ton of money. But it’s also true that keeping good records isn’t always an easy task.
Lately there have been a few really good tax software programs pop up that you can purchase in order to help you keep track of your tax related paperwork. Two of the cool programs that I recommend is www.Deductr.com and Godaddy’s online bookkeeping, they not only provides a great tracking system but also educate you on the latest tax changes.