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Tax Deductions For Home Based Businesses |
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Submitted by Kathleen Green
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A big advantage of working from home is the tax benefits of operating a home based business. Working from home allows you to deduct portions of bills that you are already paying to live there.
You can deduct home expenses if you actually work in your home. It is easiest to do this if you have a room set aside for your business. Figure out how bit that room is in proportion to the house, and you can deduct expenses using that percentage.
For example, if your place of doing business takes up 5% of your house, you can deduct 5% of your heating expenses for the days you work. (In other words, if you don't work weekends, you can't deduct for weekends.) YOu can deduct items such as mortgage interest (though not your mortgage itself), electricity, telephone, insurance, and expenses for maintenance and repair. In general, you can deduct the portion of expenses that directly relates to your business.
You can deduct costs for your internet service provider in proportion to the amount you use it on business, too. If it's used completely for business you can deduct it all, but be certain before you do this that you are not using it for other reasons.
The nature of your home based business is not critically important. What is most important is for you to review the related IRS regulations and make sure that your business and the manner in which you intend to operate it will qualify as a home based business.
The tax benefits of operating a home based business enable you to deduct things you would otherwise be paying in full. If you are considering a business from home, it's a good way to lower your costs. This is just one more advantage of working from home.
Warm regards,
Kenny Anderson
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