Home Business Tax Breaks – Who Doesn’t Need a Break!
Take a break – Home Business Tax Breaks!
You already know working at home in your own home based business offers many advantages, but did you know there are many tax advantages as well?
Here in the United States, many people start their own home based businesses in order to take advantage of the numerous home business tax breakss available to business owners.
Claiming the use of your home in your business can give you some significant deductions on your tax return. Home business deductions, as with anything tax-related, you must meet certain requirements determined by the Internal Revenue Service; however, if you use one room as a home office specifically for your business, you can deduct some expenses on your home based business tax deduction. This can include portions of your utility bills specifically related to that area.
Deducting your home office is just one of the possible tax breaks you may be able to take advantage of. Your phone, Internet and other office services can also provide you with a substantial home based business tax deduction. If you maintain a separate fixed phone line or cell phone specifically for your business, then all costs related to those phone lines can be tax deductible. However, if you use equipment or services in both personal and business environments, it is more difficult to establish a tax deduction. It’s not impossible, but you must meet some fairly strict requirements and maintain good records.
All businesses have expenses and other incidental costs that comes with running a business. The advantage of a home based business is the fact that many of your expenses are tax deductions. Computer, printers and office furniture are some of the expenses you can deduct from your taxes when you own your own business.
You can also take deductions for purchases of items such as office supplies, postage, advertising materials and expenses. Training required for your type of business may also be tax deductible.
By hiring your children or spouse to work as employees for you, you can potentially deduct even more. This enables you to deduct health insurance premiums and other typical employee-related expenses.
It’s always a good idea to consult with a tax professional about any deductions you are not sure of. It’s also a good idea to consult a professional when you first start your home business so that you choose the best legal structure for your business and tax situation. The tax benefits of a home based business can be great incentive for starting your own business, but remember the tax laws can be complicated.
With the convenience and costs savings of a home based business, along with the many home business tax breaks, it’s easy to see why so many people are moving towards working at home today. Just be sure to keep careful financial records for your taxes. There are good home based business accounting software programs that make this easy, even for beginners.