Home Business Tax Write-Offs

It can be difficult to know what home business tax write-offs you qualify for. So many deductions aren’t taken because they are either overlooked or business owners are unaware of them. There are also several write offs that are deducted incorrectly when filing. To avoid mistakes and to maximize your deductions, here are some main home business write-offs to look into.  

Home Office and Insurance

If you are working in your home you will need to purchase insurance. The premium for that insurance though can be written off no matter what provider you are going through. Home office space can be deducted as well, but will take a little effort on your part. First, the space needs to be for business only. Your bedroom with a computer in it, for example, is not considered a home office. Take photos to document as well as measurements. To determine the amount of your deduction, measure the space used for your home office. Take the percentage of that space from the total home space and you can claim that for your mortgage or rent deduction.

Supplies

Supplies for your home business can be tricky to write off. Any electronics such as computers, software, phones, fax machines, routers and printers can be written off provided they meet 2 qualifications. They must be used only for business purposes and they must be deducted during the year that they were purchased. Regular supplies however can be written off a little more easily. Deducting pens, paper and other typical office supplies requires that you use for business as well. Save receipts for all electronics and supplies. Make sure that they are properly dated.

Professional Fees

If you hire a lawyer or accountant, you are able to deduct those fees on your taxes. It is very important to keep invoices and documentation to prove to amount of time and work that they are doing for you in order to write off. Any licensing fees can be deducted as well. It is typical for many home businesses to require some sort of license.

Marketing

Any marketing and advertising costs that incur while promoting your business can be deducted. This includes the cost for billboards, ads, commercials and even the printing costs for business cards and fliers. It is important to keep receipts for any deductions being made.

Utilities

Internet, phone and electric bills can be written off for your home business taxes. These can be tricky to calculate as many are for personal use as well. You will need to first determine how much use is business and then deduct that percent on your taxes. Keep monthly statements as well as business logs to help document and prove your write offs.

Subscriptions

Subscriptions are often overlooked as a write-off, but can add up cost wise. Any subscription that you have directly relating to your business can be written off. This includes magazine, newspaper and website. Print off or keep receipts for the subscription payments.

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