Tax Deductions Home Business Owners Can Use
There are several considerable tax deductions home business owners can take advantage of. I don’t know about you, but I can’t bear paying more than my fair share of taxes. In these tough economic times, it is important for individuals to keep every dollar in our pocket that we can. Running a home based business is one of the best ways to keep your hard earned money in your own pocket. Although there are many other home business write offs, the six below are the major tax breaks.
Six Tax Deductions Home Business Owners Can Use
1) Mileage Expenses
One of the biggest expenses home business owners have offered is mileage expense. Business owners can honestly deduct $3000 to $5000 or more per year for using their automobile for business use. If the major reason of a trip is to conduct business, the mileage for the total trip can be deducted. Selecting the right home based business can be critical when combining typical personal use of
a vehicle and business.
2) Family Trips Even family trips may be deductible when they are planned properly. Basically, if half the days on a trip are business days they qualify. A business day includes travel and any set appointments, even if they are short. Personally, all my vacations and trips are scheduled around business.
3) Hire Kids For Tax Free Income
I really like this one! Children over 6 years old can help you in your home based business and this is one of the tax deductions home business owners regularly forget. Kids are terrific at helping perform everyday jobs for the home business, and their wages are an expense to the business. The beauty of this is that their wages are tax free and there are no payroll withholdings if the child is less than 18.
4) Deduct Health Expenses
Owning a home based business affords you an IRS approved deduction for writing off all your non reimbursed health expenditures. These can consist of insurance premiums, deductibles, co-pays, and other non-covered expenses. This deduction can be quite large
for people who experience considerable health expenses.
5) Home Office Write Off
The Home office write off is an additional substantial tax deduction. Home business owners are allowed to write off a home office provided it is the primary place of business. This office in the home deduction can convert hundreds of dollars per month from
non-deductible personal expenses to deductible expenses for business.
These expenses can incorporate a part of your rent or mortgage in addition to as utility bills such as heat and air, electricity, water, sewer, and Home Owners Association dues. Even a percentage of lawn maintenance and repairs can be deducted from working a business from your home.
6) Deduct Meals and Entertainment
Home based business owners can deduct for meals and entertainment that are required to conduct their business. There are obviously a number of regulations, but as a general rule, 50% of meals and entertainment costs can be deducted. These have to be based around a business setting and be relevant to performing the task of operating the business. Entertainment is as well deductible, and one of my favorites in this category is the 100% deduction for entertaining in the home, related to my business.
What then does this tell you? It means that if you don’t operate a home business, you had better get one. The congress has legislated for these deductions because they believe that strong home businesses are advantageous for our economy. Tax deductions home business owners make good use of fund the expense of running the business. And everyone benefits.
Filed under: Home Business Tax Deductions
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