Having a home business is besides being able to work in the comfort of your home on your own schedule also interesting because of the tax deduction for a home-based business. I want to show you how much money everybody is losing when not running a home business.
What is deductible
1. Automobile Expenses
The use of any vehicle for operating your home business can be deductible. Those are the costs of fuel, oil, licensing, insurance and maintaining. When you use your vehicle privately and for your business, keep track of the total kilometers and the kilometers you drove to earn income with your business.
2. Mortgage Interests and Property Tax
When you have a home based business, you can claim mortgage interests under Business-use-of-home as long as your workspace is your main place of business or this place is only used for your business and you need to use it on a regular basis.
How much can I deduct?
You can only deduct a portion of your expenses depending on the space of your home that is actually devoted to the business.
3. General office expenses
All expenses you have for your business such as Telephone and Cell Phone, Internet, business cards and office supplies as well as equipment such as printer and computer.
4. Travel, Meals, and Entertaining
Travel expenses you have while doing business away from the principal place of business can be deductible. When you travel and talk to a client or customer or business partner about your business on this trip, this can be considered as a business expense. You can even claim the cost of the meal you had together with this client or partner. Here is also very important that you keep records of the place, attendees and purpose of the meeting.
5. Other Business-use-of-home expenses
According to the percentage of your workspace to the entire living space, you can deduct a portion of heat, light, water, maintenance, cleaning material and everything that you need for living in this house and for your workspace. Even when the roof has to be replaced, you can claim a portion of this as business expenses. Where would you work your business when it rained into your office or if you wouldn’t have light and heat and so on?
I hope I could show you the benefits of having a home based business besides spending time with your family and working at times that are convenient for yoy.
If you have questions, please contact me or leave a comment below.
To your success,
(Founder of Simply Work From Home)