Death, Taxes, and Home-Based Business Deductions?
Website design By BotEap.comBenjamin Franklin said, “The only sure things in life are death and taxes.” Let’s face it, he was right, neither of these events can be avoided, so we must make the best of both situations. I’m not one to focus on death, but sometimes when it comes to taxes, the line gets a little blurry. Although April 15 marks the beginning of a state of fear and panic for some Americans, it can be a great day for home-based business owners. Come to think of it, home business tax deductions may be as certain as death and taxes.
Website design By BotEap.comWith the economic downturn in America, more and more people are finding their hours reduced and some even facing termination. Because of this, we as a society are forced to find new and unique ways to generate income. Some will try their hand at entrepreneurship by starting a home-based business, but for others, such an idea creates a paralyzing fear of the tax beast. Choosing not to start your own home business for fear of the tax collector is like never leaving your house for fear of being struck by lightning. The IRS is an agency to be respected, not feared. I agree that tax laws and filing deadlines can sometimes be overwhelming, but a successful home and business merger can make for a great marriage. It may also come in handy for you personally when April 15 rolls around.
Website design By BotEap.comMost self-employed people who operate a business out of their home find it easy to qualify for home office deductions. Most can qualify for deductions if you use part of your home regularly and exclusively for business purposes. If you have a part of your home (the IRS classification of a home is a house, condo, apartment unit, or even a boat) that can be used as your primary place of business or where you meet with clients or clients, then You are well on your way to meeting the IRS requirements for home-based business tax deductions.
Website design By BotEap.comLet’s face it, you’re already living in your home and paying the bills for it, so why not turn part of it into a business area? Real estate tax, mortgage interest, utilities, homeowner’s insurance, home depreciation, and repairs are possible deductions for homeowners. Even if you rent, you can still claim some of the same things a landlord does, and in most cases, that could even include paying your rent.
Website design By BotEap.comNow you may have a reason to turn that extra den or bedroom into a home office, instead of cluttering it up with holiday storage. A detached garage or other detached structure may also be used if that building is used in connection with your trade or business. Storage areas in your home may also be included for deductions if you use them to store inventory or product samples.
Website design By BotEap.comDo you want to venture into the world of home-based businesses and get these tax breaks, but are still afraid of that lightning strike? Please feel free to contact your local tax professional or the IRS for clarification. Death and taxes may be certain, but now, with the correct knowledge of the rewards available, you too can be certain.