Benjamin Franklin said, “The only things certain in life are death and taxes.” Let’s face it, he was right, neither one of these facts can be avoided, so we must make the best of both situations.
I’m not one that likes to focus on death, but sometimes when it comes to taxes, the line gets a little blurred. Even though April 15th for some Americans ushers in a state of fear and panic, it can be a great day for home based business owners. Come to think of it, home business tax deductions may be just as certain as death and taxes.
With the economical down turn in America, more and more people are finding themselves with a reduction in work hours and some are even facing termination. Because of this, we as a society are being forced to find new and unique ways to bring in income. Some will try their luck at entrepreneurship by starting a Home Based Business, but for others such an idea brings on a paralyzing fear of the tax beast.
Choosing not to start your own Home Business because of a fear of the taxman is like never leaving your house because of a 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 at times be overwhelming, but a successful merge of business and home can be a great marriage. It can also be helpful to you personally when April 15th comes around.
Most self-employed individuals who operate a business out of their home find it easy to qualify for home office deductions. Most can qualify for deductions if they use part of their home regularly and exclusively for business purposes. If you have part of your home (IRS classification of a home is a house, condominium, apartment unit, or even a boat) that can be used as your principal place of business or where you meet with clients or customers, then you are well on your way to meeting the IRS requirements for Home Based Business tax deductions.
Let’s face it, you are already living in your home and paying expenses on it, so why not turn part of it into a business area. Your real estate property tax, mortgage interest, utilities, home owners insurance, depreciation of your home and repairs are all possible deductions for entrepreneurs who own their own home. Even if you rent, you can still claim some of the same things that a homeowner does, and in most cases, that might even include your rent payment.
Now you may have a reason to turn that den or spare bedroom into a home office, instead of clogging it up with Christmas storage. A detached garage or other separate structures may also be used if that building is used in connection with your trade or business. Storage areas of your home can also be included for deductions if you use them for storage of inventory or product samples.
Do you want to venture into the Home Based Business world and gain these tax advantages, but you are still scared of that lighting strike? Give yourself peace of mind and contact your local tax professional or the IRS for clarification. Death and taxes may be certain, but now with the right knowledge of the rewards available, you can be certain as well.
If this sounds interesting to you and you need a home business idea, please let me know or visit the Work With Glyna tab for more information.
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Yours in Success,
Great post Glyna!
I live in Sweden but I think it is something similar here. It can be a good thing to take advantage of instead of see it just like a pain, that’s for sure!
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Glyna, Great timing for this post!
As many are concerned about the amount of taxes paid and wonder if they will get a good tax return, perhaps they will consider the many benefits of having a home based business.
It just makes cents (& lots of dollars!) 😉
I dread tax season every year. (if you can call it a season) This year I was hit with a surprise. I incorporated my convenience store. I was advised to do so through my CPA. I did not know that my taxes had to be done by March 15th. Yes, it was a surprise. Even though, I incorporated the store she told me that my home based business would fall under the corporation if I wanted it to. So that was a blessing. I had more tax write offs than most corporations.
Most companies incorporate to get more tax benefits. Corporation plus home based business means a lot of write offs.
So if you are reading this blog, take Glyna’s advice and start a home based business.
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Great Tips Glyna, Thank you!
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