Legitimate Tax Deductions for Your Home Based Business
Ok, so you’ve heard that if you work from home, you can write off a bunch of stuff on your taxes? But what “stuff” is eligible? And what determines if you have a legitimate business that makes you some money and maybe gives you some perks?
Profit Motive - Run your endeavor with a reasonable expectation of profit. Have a written business plan—a 5-year projection of income and expenses that will show a profit at some point. Write a marketing plan (there are lots of templates available online) showing projected marketing activities. Work your business regularly. One or two hours a day several days a week qualifies you, and keep detailed records. If you go to training seminars or take online classes that you have paid for, provide documentation.
Expenses - Section 162(a) of IRC says all ordinary and necessary expenses paid in connection with a business are deductible. An ordinary expense is one that is common and accepted in the taxpayer’s line of work. A necessary expense is one that is helpful and appropriate for work. Here’s a list to get you started: advertising, deductible business gifts, , business use of home, entertainment (taking a client or potential client to lunch), travel (if you drive to do presentations or attend classes), insurance, interest on credit cards or loans, office supplies, percentage of telephone and computer costs.
Keep Adequate Records – Keep a calendar, account book, documentary evidence that will support each element of your expense. This would include receipts, canceled checks, bills. The IRS is a stickler for this type of documentation so be sure to keep good records.
IRS Publications – Business Use of Home (Pub. 587); Home Based Business Tax Avoidance Schemes (Pub. 4035); Business Expenses (Pub. 535
Do your homework and keep good records. Looking for a home based business? I’ve got the solution. Tycoon Wealth System. To learn more, take a look at the crazy offer the founder is offering for a short time at
- Contact Information
- Shelley Rowan
- Business Coach
- Tycoon Wealth Solution
- Contact via E-mail
This news content may be integrated into any legitimate news gathering and publishing effort. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.