. To qualify as business
deductions, expenses must be reasonable and necessary. Taxpayers
are required to keep accurate books and records. The records
should be complete enough to include types and sources of
income, gains, losses, costs, expenses, and substantiation for
tax deductions. Your records should include items such as bank
statements, cancelled checks, receipts or invoices, credit card
statements, diaries and logs. Here are some examples of what you
could deduct. Remember...also check with a professional first.
Tax Deductions for Home-Based Businesses Nobody likes tax time,
but owning a home-based business can literally save you
thousands of dollars a year in taxes by allowing you to turn
personal expenses into legitimate, allowable deductions.
The more tax deductions your business can legitimately take, the
lower its taxable profit will be. For example, if you earn
$100,000 per year from your job and home-based business,
combined, but have $15,000 in allowable business deductions from
your business, you would only pay taxes of your net income of
$85,000. At 30% tax rate, that could save you $4,500 in federal
taxes!
We recommend you talk to your accountant about allowable tax
deductions, but here are some tax strategies to keep in mind:
Did you ever want to just spend a day with your family? Did you ever want to attend a special funeral but you had to work? What about visiting someone in the hospital? Can you just take a few hours off in the day? This is one of the best reasons for having a home business...you are able to manage your own time. This does not mean working less; rather it means flexibility of time scheduling.
If you work hard, if you are committed to your business, you will reap the benefits...and you will also get to keep the profit.
The stress of working for an unfair and egotistical boss can be tremendous. It has even been suggested that this kind of stress can lead to heart disease. Work related stress has been the cause of marriage break ups. Some people just cannot come home at night and leave their work related issues AT the office. They bring their concerns, fears and frustrations home with them...and the whole family suffers under this strain. I had a wonderful boss for 25 years. That changed. I work from home now.
Numerous studies show that office stress is associated with susceptibility to illness such as cold and flu including carpal tunnel syndrome. You spend 8 - 10 hours at work. If you do not get along with your co-workers, if there is a lot of office politics these hours 8 hours can seem an eternity. Office politics and employee dissention can eat away at the inner core of your being.
RUNNING YOUR OWN INTERNET BUSINESS IS THE WAVE OF THE FUTURE!
By choosing to work at home, you can choose your own business hours and personal hours to fit your needs. Many successful home business entrepreneurs will also hire nannies to look after their little ones while working in their home office. They love being there for their children and can still devote the necessary hours to their work.
No one can limit your talents. You can outsource what you are not good at doing. Instead, you can concentrate on what you are good at doing.
Working at home means you wake up and look out the window; you either smile or frown at what you see and go get yourself a cup of coffee. You watch the news; you watch the traffic problems, and then you go to work, at home. If you have kids at the daycare, you know all too well the stress of getting there on time to pick them up after a long day at work. Daycare workers may love to look after your little treasures in the daytime...but, come a certain time in the evening, and they want your little ones gone. Many daycare workers charge a big fee for overtime, and rightfully so, but many also get very upset when the children are picked up late.
Do you have to work when asked to do overtime? Are you worried about losing your job if you do not comply? Do you feel pressured to work on your days off? Do you make plans to be with your family only to have your boss veto your plans? Working at home means you are able to schedule your own time.
You choose with who you work. You choose how you work. Always remember, working at home does NOT mean working less.
One very special reason... especially this time of year, to start a home based business is TAX ADVANTAGES! Keep your hard earned dollars out of Uncle Sam's pocket
About the author:
My name is Ruth Bird. I have been married for 27 years to my husband Chris. Chris has been battling the monster, MS, for a number of years.To visit my home business and tax site, click here.
Written By: Ruth Bird