Tax time can be one of the most anticipated periods of the year. After the holidays have become a memory and before the fun of summer begins, we must devote several hours of our lives to completing this project. This can be especially challenging for the home based business owner. There are several deductions that are available for the work from home individual. These ideas can help reduce your tax burden.
1) Accountant Costs
If you use the services of an accountant, these costs are totally deductible for a work at home business.
2) Advertising Costs
Any amount of money that is spent to advertise an internet business is tax deductible. Business cards, flyers, newspaper ads, internet ads, etc.
3) Bank Fees
All of the bank costs incurred to run a home business are tax deductible.
4) Research And Training Materials
Any educational materials purchased to increase your expertise for developing, maintaining and improving a home based business are a tax deduction. This includes software and E-books.
5) Internet Service Provider
Keep a log of the business hours spent online and personal time on the internet. The business percentage can be taken as a tax deduction against ISP costs per month.
6) Web Hosting Fees
The monthly costs paid to a web host provider for managing an internet business site are deductible.
7) Long Distance Telephone Costs
Keep an accurate account of the amount of money spent for long distance phone calls that relate to a home business.
8) Office Equipment
Your computer, printer, fax machine, answering machine, scanner, furniture, remodeling, etc. are tax deductible when used for a home based business. Some people choose to depreciate the cost over several years or take the entire expense at one time. Your tax situation will determine the decision.
9) Shipping Costs
If you ship products, the amount of money spent for boxes, tape, packing peanuts, bubble wrap, etc. is tax deductible. If you use a personal car to transport packages to the post office, keep a log of the distance traveled.
10) Office Supplies
Paper, stationery, folders, pens, pencils, tape, envelopes, printer ink, address labels, post-its, postage stamps etc. that are used for the operation of a home business are a deduction.
11) Interest Expenses
All of the interest accumulated on credit cards for the development, maintenance and improvement of a home based business is a tax deduction. If you have any loans that were taken out to start a home business, this interest is also tax deductible.
12) Office Space
Rent, taxes, mortgage interest, utilities, phone etc are partly deductible. The area devoted to a home based enterprise must be used exclusively for business purposes and the deduction can only be a percentage of the total house costs based on the amount of space the home business uses. Using one room for an office and another room for packaging your products creates a tax deduction for both rooms.
This is not an all inclusive list of tax deductions for your home business. The IRS has a publication (IRS publication 587: Business Use Of Your Home) that clearly defines all of the allowances that you can take. The best approach for completing your tax return is keeping accurate records. The idea of sacrificing several hours of your time for calculating taxes is not very exciting. Unfortunately, it is a task that all of us must face. Good record keeping within the guidelines of these ideas will develop more time for yourself and less time for the IRS when you begin your return.
”The way to get ahead is to start now.”
John Fortner lives in Oregon and works from his home through his online pursuits. He is the owner of Best-Income Opportunities which offers free information and proven opportunities for creating work at home businesses. To learn more about this topic please visit his website at: http://www.Best-IncomeOpportunities.com To receive free information for starting a home business please go to: http://www.Best-IncomeOpportunities.com/optin.html
If you’re a homeowner and planning to have some home improvements projects in your house to make it more energy efficient, now is the perfect time to do so! Why? Because there are federal energy tax credits available for consumers who make energy-conscious purchases and home improvements.
Energy tax credits are offered at 30% of the cost up to $1,500 in 2009 and 2010 for the following:
• Windows and doors (exterior windows, skylights, storm windows, exterior doors, storm doors)
• Roofing (metal roofs and asphalt roofs)
• Insulation
• HVAC (heating and air – all types)
• Water heaters
These tax credits are for existing homes only.
Other homeowner energy tax credits that are available at 30% of the cost with no upper limit are:
• Geothermal heat pumps
• Solar panels
• Solar water heaters
• Small wind energy systems
• Fuel cells
The above tax credits on the other hand, are offered for both existing homes and those under construction, until 2016.
Taking advantage of these energy tax credits is so much easier than availing of home improvement grants. For one home improvement grants are not readily accessible to the average homeowner. While free government home improvement grants do exist, there is limited information for these so you’d really need to be patient in your search. And even when you find one where you may qualify for, the application process is lengthy and tedious, and the results depend largely on whether your city or state has the available funding.
But with the federal energy tax credits, the savings you get are as good as a done deal – no applications or proposals needed!
So if you have some home improvement plans in mind anyway, why not go green? Your overall savings is two-fold: you get your energy tax credits, and you save on electricity and heating costs by making your home energy efficient.
If you are looking for a handyman in Edina, MN, be sure to visit the Edina handyman directory to find a contractor who can help you take advantage of these tax credits!
