Home-Based Business Tax Deductions You're Not Taking

There are several home-based business tax deductions that are overlooked and not being taken advantage of. Whether home business workers are unaware of these deductions or they are filing their taxes incorrectly, thousands of people are missing out on easy money. Below are a few deductions that can be taken by those with home businesses.

Internet and Phone Deductions

If you are using a phone or internet in your home business, you are eligible to deduct the cost. While you can only deduct the amount that is used solely for business purposes, a large amount is able to be written off. Log and keep track of the time spent on-line and on the phone for business. When you get your monthly bill, take that percentage to determine the amount of the overall cost to deduct. You can also deduct a percentage of other utilities such as electricity. You will need to determine the amount of time you do work in general to make this deduction.

Rent or Mortgage Deduction

You can deduct the cost of the room that you use as your office in your home. While it takes a little work, it is worth the effort put in to get a higher return. To do this, the room that you use as your home office needs to be used for business purposes only. Measure the size of the room and then determine the percentage of space of your whole house. If your office is 8% of the size of your own, you can deduct 8% of your yearly mortgage payment or rent. You are also able to claim the interest that you pay towards your mortgage. The insurance premium you pay to work at home can also be deducted no matter what provider you use.

Subscriptions

If you subscribe to a magazine, newspaper or website that directly pertains to your business, you can deduct it on your taxes. Take the yearly amount that you pay for each subscription and add them together to deduct. This does not include the daily household paper that you get.

Office Supplies

Office supplies can be a tricky deduction. You have to use the supplies solely for business in order for them to be eligible for deduction. Computers, printers, fax machines, phones, routers and software can all be deducted. This write-off can be for the price of the item, but needs to be done during the year that it was purchased. Pens, pencils, paper and other supplies can also be deducted with the proper documentation.

Marketing

Marketing and advertising expenses is one deduction that can be costly but is often overlooked. You can deduct the cost for any marketing expense that you have. This includes business cards, fliers, newspaper and internet ads, commercials and even billboard costs. Make sure that you can provide documentation for this. Even the price of copies can be deducted as long as you can prove what you paid for them.

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