Keeping more of your tax money with your home based business
How implementing just a few of the ideas here can save you thousands every year.
The following are just a few ideas I have learned since starting my own
home based business.
To get the maximum deductions you must find an expert in home-based businesses. Many CPA's are not really familiar with these laws.
According to experts the most important tax break for a home-based business is the home-office deduction. When you use a room in your home regularly and exclusively for you business you can write a percentage of things like rent or mortgage, utilities,trash collection and security system off on your taxes.
The way to figure this is count all your rooms except bathrooms and halls. If you have 6 rooms including your office room, you can deduct 1/6 of the above mentioned.
Anything over the basic phone charge like call forwarding, 3 way calling etc. is also deductible.
If you use your vehicle for your business the vehicle mileage plus depreciation can be claimed in the same year. An example of how to cash in on this is, say your going to the grocery store but while your there you put up one of your business flyer's. Your trip is now a tax deduction.
If you have kids, this is my favorite deduction. Instead of an allowance you can pay them a salary and deduct it. They can simply hand out flyer's or do their chores which gives you more time to devote to your business.
You take the money they've earned and put it a bank account in their name. Then if you want to send them to a private school, take dance lessons, play hockey. You take money from their account to pay for this. That makes all these things tax deductible.
If they have money left over you can let them buy something they really wanted. I think you'll find more times than not, they will decide they didn't really want the item that much if they have to spend their money I think this can be a great lesson for some kids who think money grows on trees.
Children can earn up to $5,150 a year before they have to file a tax return. Suddenly things you would have probably spent on your kids anyway become a tax write-off. For more information please read the following publication.
Tax Rules for Children and Dependents
Please be advised I am not a tax expert so please consult with one before implementing any of the following strategies with your home based business or MLM.
For questions or comments on this article home based business & taxes please drop us a line.
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