Saturday, September 16, 2006

Saving Money: Possible Tax Deductions for Home Businesses

If you operate your own home business, then you are probably
aware that there a few drawbacks to being self-employed.
Working for yourself often means that you lose many
workplace benefits, such as group insurance, sick leave,
paid vacations, etc. However, the government does provide
solace to those who have an entrepreneurial spirit, and this
solace comes in the form of tax breaks. There are many
possible tax deductions for home businesses; you simply have
to be well-informed about them.

Why should you go through the trouble? Well, because you’ll
earn more money that way. By knowing all the possible tax
deductions that you can take, you’ll come away with more of
the benefits that your business generates, instead of
getting cleaned out by the government. When it comes to
taxes, make no mistake about it – knowledge is power.

If you run a home business, some of the possible tax
deductions for you are:

Home office costs, such as those that involve office repairs
and maintenance. Expenses racked up through janitorial
services, for example, when shown to be needed by the
business, are deductible, as are waste management and
garbage disposal services. Business furniture and equipment
may also qualify for deductions in their year of purchase,
as long as the amount does not exceed a certain limit.

Utility costs, such as electricity and water. The deduction
applies to those areas that are used regularly and
exclusively for business.

Telephone costs. This only applies if you have a separate
line for use in business. A single line that is used for
both business and personal calls does not qualify. However,
if you make long distance calls and/or incur fax
transmission fees, those expenses are deductible not matter
which type of phone you use.

Rent or lease payments. A percentage of your rent, lease, or
mortgage interest payments can be deductible provided that
you are using the property regularly for business purposes.

Employee wages and employee benefits. If you are an employer
of labor, you can deduct a portion of your salary and
benefit expenses. Employee education and training costs are
also deductible.

Education costs necessary in your line of work. This applies
especially to professionals. Those who need continuing
education to maintain their expertise may deduct the cost of
this education from their tax returns.

Real estate taxes on business property. A portion of real
estate taxes are considered deductible by the IRS.

Personal expenses. Some personal expenses, when conducted in
conjunction with business affairs, are deductible. A portion
of your automobile expenses, meal allocations, and travel
and entertainment cots may qualify for deduction, as log as
they are related to your business.

A final reminder: Try to maintain as accurate records as is
possible. Document your deposits, income, expenses and
deductions. This way, you will have proof validating your
tax deductions. Because tax laws are complex and often
change, it is often advisable to consult a professional.
This will allow you to claim as many possible tax deductions
for home businesses as you can.

*Your Source for the Best Home Business Ideas*

Home Based Affiliate Business