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Tax Deductions for Home Based Businesses
by Kenny Anderson
Published on this site: March 22nd, 2006 - See
more articles from this month
A big advantage of working from home is the tax benefits of
operating a home based business. Working from home allows
you to deduct portions of bills that you are already paying
to live there.
You can deduct home expenses if you actually work in your
home. It is easiest to do this if you have a room set aside
for your business. Figure out how bit that room is in proportion
to the house, and you can deduct expenses using that percentage.
For example, if your place of doing business takes up 5% of
your house, you can deduct 5% of your heating expenses for
the days you work. (In other words, if you don't work weekends,
you can't deduct for weekends.) You can deduct items such
as mortgage interest (though not your mortgage itself), electricity,
telephone, insurance, and expenses for maintenance and repair.
In general, you can deduct the portion of expenses that directly
relates to your business.
You can deduct costs for your internet service provider in
proportion to the amount you use it on business, too. If it's
used completely for business you can deduct it all, but be
certain before you do this that you are not using it for other reasons.
The nature of your home based business is not critically important.
What is most important is for you to review the related IRS
regulations and make sure that your business and the manner
in which you intend to operate it will qualify as a home based business.
The tax benefits of operating a home based business enable
you to deduct things you would otherwise be paying in full.
If you are considering a business from home, it's a good way
to lower your costs. This is just one more advantage of working
from home.
Warm regards,
Kenny Anderson
Kenny Anderson is the Principal at Tiger Trade, LLC
a subsidiary of Goeins-Williams Associates, Inc. of Wilmington,
DE and Aurora, CO. A much sought after Speaker and Business
Consultant on a myriad of Small Business, Internet
Marketing and Entrepreneurial related issues. For the five
best affiliate programs go to: http://www.TigerTradeLLC.com
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