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Running a home based business
reaps many wonderful tax deductions that other businesses
some times may not claim. Unfortunately to many small
business owners end up paying the government taxes every
year because they are unaware or several small business
deductions that are available.
Most of the time any
expenses that are related to your business can be added as
a deduction on your taxes. If you do not pay taxes through
out the year, deductions can help you from paying a large
amount of taxes each year and can also adjust earned
income. Try to avoid paying large amounts of taxes or
owning any money by keeping track of simple things!
Each business is a bit
different so be sure to mention these ideas to your tax
advisor or accountant to see if your business can qualify
for these deductions.
1- If you join any business
or purchase into any franchise, the expenses such as kits,
or franchise fees may be claimed as a deductions.
2- Business Supplies. Be
sure to save all receipts for any supplies you purchase
for your business use. Computer paper, business cards,
pens, catalogs, or any items you purchase and use for your
business.
3- Advertising- Most
advertising can be claimed on your taxes. Keep all
receipts for any newspaper ad’s you may run, or any
advertising you do online. Advertising is a business
expense and in most cases can be written off.
4- Items Given Away- Keep a
list of any items you may give away, and the costs of
these items. Most freebies may also be written off.
5- Phone bills and internet
access- If you have a phone line for business use or have
the internet in your home or office for business use, save
all receipts for each bill paid. These items are business
expenses and may also be written off.
6- An in home office- If
you have an office in your home, make sure to let your tax
advisor know. Using a room in your home as an office can
also be added on taxes.
7- Long distance calls- If
you make any long distance calls that are related to your
business, make sure you keep all phone bills showing the
calls and the amounts charged. If these calls are related
to your work, the cost of the calls may also be written
off in most cases.
8- Returned Checks and Bank
Fees. If you incur and bounced checks from customers and
can not collect on them, those amounts may be deducted,
along with any fees you were charged from your bank. Be
sure to keep the returned check, the letter from your bank
and your bank statement to show the fee you were charged.
9- Postage- All postage
costs paid by you or shipping fees may be claimed. Keep
receipts for all shipping supplies, and postage.
10- Computers- If you
purchase a new computer for business use, the cost of the
computer may be claimed. You may also claim depreciation
for 3 years after the computer was purchased.
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