WORKING FROM HOME: TAX TIME
BY CATHERINE MORAN, BUSINESS OWNER, with Cathy Fairbairn
Before Tax time leaves us for good, it may be prudent to plan for the next tax year. I never realized that by having a home-based business, I could get a tax advantage from all the write-offs that are allowed. You’ll be able to use that money to put back into your business, and use it for things that you really need. I’m learning all the time, more and more. I would like to share with others what I’ve learned about the tax advantages of a home-based business. To be organized may take a little more time, but believe in yourself, and know that you can do it! I didn’t know I could do this business in the beginning, but I’ve come through that and I am honored to help teach and train others how to work from home. Sharing information is a part of the benefits we have with a home-based business through www.hopeinacan.com.
You will want to deduct expenses regarding transportation. You can keep track of the mileage, when you use your car for business, which is a very simple way. I use this method because I use my car all the time for my business. Since my business is portable, I can do my business anywhere I am, whether it’s in my car or at home or on my way to an appointment. I have a sign on my car so I am always advertising when I’m in my car, so I write off all my mileage. You can also deduct the cost of gas and car repairs on your taxes as an alternative. If you have a good accountant, he can advise you as to which method is best for your business, for your own circumstances. When you’re traveling, your air fare, transportation costs, hotel room, meals, anything associated with your business is a tax write-off.
Anything you do with advertising—if you make flyers and put them up in a supermarket, that cost is part of your tax write off. Business cards and post cards, or other printed materials, are considered advertising. You want to keep all your receipts for your expenses--that is really important. If you participate in a health fair or event, or have an exhibit or booth in a show, you can write off your expenses. If you’re introducing your products to other people, or when helping other people that have joined you in the business, you can count that towards advertising expenses. Any samples you give away are considered advertising. If you let people sample your product, you can write that off as advertising. And if you eat lunch that day, or dinner that night if you are talking business, you can deduct that at 50% off the cost of meals. You keep all your receipts as back-up, and you can claim that on your income tax as a business expense.
When working from home, if you use a room in your house for your office, you can write off the room where you’re working, and a part of your electric bill is eligible, that can be a part of it. Now some accountants may advise against that for various reasons, but if you have a good accountant who knows what he’s doing—make sure you run it by him and he can advise you the best case for you. Everybody has different circumstances. Also any office supplies that you need to purchase—stationery, pens and pencils, paper, printer ink, printing costs, staples, any office equipment (Kindle with books pertaining to your business, ipad, monitor, printers, computer, fax, or the like.) If you buy a binder with loose leaf paper, or notebooks that you will use in your business, that counts. If you buy a container or a file cabinet that you use in your office, that’s a write-off. Anything you use in your office that you need for your business, that’s an expense. A new lamp for my office counts, or my electric pencil sharpener. As long as it’s being used in your home office for business, it’s eligible.
Business expenses such as the cost of internet and phone services, what you use for your business, whether it’s a home phone or cell phone, is tax deductible. My internet and phone service is essential for my business, so I can write off the cost of those services. I have a toll free number that I use for my business, and that’s a business expense. Any classes you take, if you join something to learn more, that’s going to help your business, is tax deductible. If you buy books to help you improve your knowledge regarding your business, they are tax deductible. If you have to pay for a webcast or a screen sharing account (I use join.me), that should be included in your business expenses.
Once someone asked me if they could deduct the cost of getting their hair styled or nails done. No, that’s not an allowable expense because you most likely would be doing that anyway. Now if you’re a model or a cosmetologist as a part of your business, that would be different. Ours is about health and supplements. If you have a lunch at your house to introduce your products to customers, whatever you spent to have that lunch you can claim that on your income tax as a part of your business. If you buy juices, cups, water, napkins, food, whatever, all of that can be included as a part of your business, that’s allowed. Now, I didn’t know that when I started my business, but if others knew the advantages, they might jump on board, too. It’s fun!
Being organized really helps. And it’s good for you. Even if you don’t consider yourself an organized person; well, we all can learn. It’s part of the journey. If you would like to start a home-based business, call me at 1 855-921-HOPE (4673), or go to www.hopeinacan.com, "Contact Us." I’d love to help you get started!
You will want to deduct expenses regarding transportation. You can keep track of the mileage, when you use your car for business, which is a very simple way. I use this method because I use my car all the time for my business. Since my business is portable, I can do my business anywhere I am, whether it’s in my car or at home or on my way to an appointment. I have a sign on my car so I am always advertising when I’m in my car, so I write off all my mileage. You can also deduct the cost of gas and car repairs on your taxes as an alternative. If you have a good accountant, he can advise you as to which method is best for your business, for your own circumstances. When you’re traveling, your air fare, transportation costs, hotel room, meals, anything associated with your business is a tax write-off.
Anything you do with advertising—if you make flyers and put them up in a supermarket, that cost is part of your tax write off. Business cards and post cards, or other printed materials, are considered advertising. You want to keep all your receipts for your expenses--that is really important. If you participate in a health fair or event, or have an exhibit or booth in a show, you can write off your expenses. If you’re introducing your products to other people, or when helping other people that have joined you in the business, you can count that towards advertising expenses. Any samples you give away are considered advertising. If you let people sample your product, you can write that off as advertising. And if you eat lunch that day, or dinner that night if you are talking business, you can deduct that at 50% off the cost of meals. You keep all your receipts as back-up, and you can claim that on your income tax as a business expense.
When working from home, if you use a room in your house for your office, you can write off the room where you’re working, and a part of your electric bill is eligible, that can be a part of it. Now some accountants may advise against that for various reasons, but if you have a good accountant who knows what he’s doing—make sure you run it by him and he can advise you the best case for you. Everybody has different circumstances. Also any office supplies that you need to purchase—stationery, pens and pencils, paper, printer ink, printing costs, staples, any office equipment (Kindle with books pertaining to your business, ipad, monitor, printers, computer, fax, or the like.) If you buy a binder with loose leaf paper, or notebooks that you will use in your business, that counts. If you buy a container or a file cabinet that you use in your office, that’s a write-off. Anything you use in your office that you need for your business, that’s an expense. A new lamp for my office counts, or my electric pencil sharpener. As long as it’s being used in your home office for business, it’s eligible.
Business expenses such as the cost of internet and phone services, what you use for your business, whether it’s a home phone or cell phone, is tax deductible. My internet and phone service is essential for my business, so I can write off the cost of those services. I have a toll free number that I use for my business, and that’s a business expense. Any classes you take, if you join something to learn more, that’s going to help your business, is tax deductible. If you buy books to help you improve your knowledge regarding your business, they are tax deductible. If you have to pay for a webcast or a screen sharing account (I use join.me), that should be included in your business expenses.
Once someone asked me if they could deduct the cost of getting their hair styled or nails done. No, that’s not an allowable expense because you most likely would be doing that anyway. Now if you’re a model or a cosmetologist as a part of your business, that would be different. Ours is about health and supplements. If you have a lunch at your house to introduce your products to customers, whatever you spent to have that lunch you can claim that on your income tax as a part of your business. If you buy juices, cups, water, napkins, food, whatever, all of that can be included as a part of your business, that’s allowed. Now, I didn’t know that when I started my business, but if others knew the advantages, they might jump on board, too. It’s fun!
Being organized really helps. And it’s good for you. Even if you don’t consider yourself an organized person; well, we all can learn. It’s part of the journey. If you would like to start a home-based business, call me at 1 855-921-HOPE (4673), or go to www.hopeinacan.com, "Contact Us." I’d love to help you get started!