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Home-Based Business Owners Know How To Save On
Taxes
Are You Eligible For Home-Based Tax Deductions?
New changes in the tax laws have made it easier than ever to claim Home
Office Deductions and keep more of what you earn. If you carry on your business
at home, you can include a lot of your personal expenses as business expenses
and get deductions.
You may be thinking, "I have an Accountant/CPA/Tax
Preparer/Tax Software who knows all about tax deductions so I don't have to
know anything about them."
Just because you have a paid tax consultant,
does not mean that you do not need to know how to save on taxes. Having
information will help you save thousands of dollars. Many accountants/CPAs/tax
consultants are not specialists in home-based tax deductions. They are not
updated with the recent changes related to home-based businesses. You who have
to be informed about what deductions you can claim. If there is a mistake in
your returns, you are responsible for it and you are the one who will get into
trouble.
To qualify for these deductions you must meet 2
conditions:
Condition 1: Do you work as an Internet marketer out of
your home (on your "home computer)?
To qualify for deducting
expenses related to using a workspace for business in your home, your home must
be
- Your "principal place of business " or you must
use the space only to earn your business income.
- Use it on a regular and ongoing basis to meet your
clients, customers, or patients.
Condition 2: Are you in business to make a
profit?
Whether you made a profit or not is irrelevant. Even if you
lost money but intended to make a profit these deductions are still available
to you.
If the above apply to you, then you do own a Home-Based Business
and are qualified to deduct Business Assets, Direct and Indirect
Expenses.
Business Assets include business equipment such as computer,
fax machines, business furniture such as desk (your dining room table for
instance), desk chair and filing cabinets. These are 100% deductible if they
are used "exclusively" for business purposes.
If these assets are not
used "exclusively' for business the amount you can deduct is proportionally
related to how much these things are used in your business. It is possible to
deduct a portion of your living room, sofa, DVD player etc if you meet certain
conditions.
Direct Expenses are those directly related to conducting
your business. This would include office supplies, telephone service,, cellular
phones, ISP service, hosting, advertising etc. Direct expenses are generally
100% deductible.
Indirect Expenses include such things as rent on your
home, utilities including heating and air conditioning and general repairs such
as replacing a roof or repainting the exterior of your home.
These are
all authorized legal deductions passed into law specifically for Home-Based
Businesses by congress.
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