Working from Home: Tax Time
By Catherine Moran with Cathy Fairbairn
Before Tax time leaves us for good, it may be prudent to plan for the upcoming 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 such as www.hopeinacan.com.
Before Tax time leaves us for good, it may be prudent to plan for the upcoming 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 such as www.hopeinacan.com.
You will want to deduct expenses regarding transportation. You can keep track of the mileage whenever you use your car for business, which is a very simple way to track transportation expenses. I use this method because I use my car all the time for my business. Since my business is portable, I can work anywhere—in my car, at home, or on my way to an appointment. I also have a sign on my car (another write-off) so that I am always advertising when I’m in my car. If you prefer not to track mileage, instead you can deduct the cost of gas and car repairs from your taxes. If you have a good accountant, he can advise you as to which method is best for your business, and for your own circumstances. When you are traveling, your air fare, transportation costs, hotel room, meals, and anything else associated with your business is a tax write-off.
Anything you do with advertising—for example, 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—this 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 any expenses related to this participation.
Additionally, if you are introducing your products to other people or helping other people who have joined you in the business, you can count this toward advertising expenses. Any samples you give away are considered advertising. If you let people sample your product, you can write this 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 must keep all your receipts as back-up, and you can claim these items 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. A part of your electric bill is eligible as a tax write-off as well. Some accountants may advise against this write-off 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.
Of course 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, computer monitor, printers, computer, fax, and the like.) If you buy a binder with loose leaf paper, or notebooks that you will use in your business, these items are write-offs. If you buy a container or a file cabinet that you use in your office, this is a write-off. Anything you use in your office that you need for your business, is a business expense. For example, a new lamp for my office counts, and so does my electric pencil sharpener. As long as it is being used in your home office for business, it is eligible as a tax deduction.
Business expenses such as the cost of internet and phone services—whatever you use for your business—whether it is 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 is a business expense.
Any classes you take, and any groups or organizations or opportunities you join to learn more or to network, to help your business, are 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, this is 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. Our business is about health and supplements, so the expense of good grooming is not an allowable tax deduction. However, if you have a lunch at your house to introduce your products to customers, whatever you spent to have that lunch you can claim on your income tax as a part of your business expense. If you buy juices, cups, water, napkins, food, whatever, all of this can be included as a part of your business as allowable tax write-offs. I didn’t know these things when I started my business, but if others knew the advantages of running a home-based business before they began, they might jump on board too. It’s fun!
Being organized really helps. And it is a good habit to embrace. Even if you don’t consider yourself an organized person; well, we all can learn. It is part of the journey. If you would like to start a home-based business, or to learn more about the one I'm involved in, just call me at 1-877-793-9205, or click on the green "contact us" button below. I’d love to help you get started!
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Catherine Moran is a former hair stylist and now a very satisfied home-based business owner with HopeinaCan.com.
Anything you do with advertising—for example, 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—this 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 any expenses related to this participation.
Additionally, if you are introducing your products to other people or helping other people who have joined you in the business, you can count this toward advertising expenses. Any samples you give away are considered advertising. If you let people sample your product, you can write this 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 must keep all your receipts as back-up, and you can claim these items 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. A part of your electric bill is eligible as a tax write-off as well. Some accountants may advise against this write-off 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.
Of course 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, computer monitor, printers, computer, fax, and the like.) If you buy a binder with loose leaf paper, or notebooks that you will use in your business, these items are write-offs. If you buy a container or a file cabinet that you use in your office, this is a write-off. Anything you use in your office that you need for your business, is a business expense. For example, a new lamp for my office counts, and so does my electric pencil sharpener. As long as it is being used in your home office for business, it is eligible as a tax deduction.
Business expenses such as the cost of internet and phone services—whatever you use for your business—whether it is 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 is a business expense.
Any classes you take, and any groups or organizations or opportunities you join to learn more or to network, to help your business, are 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, this is 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. Our business is about health and supplements, so the expense of good grooming is not an allowable tax deduction. However, if you have a lunch at your house to introduce your products to customers, whatever you spent to have that lunch you can claim on your income tax as a part of your business expense. If you buy juices, cups, water, napkins, food, whatever, all of this can be included as a part of your business as allowable tax write-offs. I didn’t know these things when I started my business, but if others knew the advantages of running a home-based business before they began, they might jump on board too. It’s fun!
Being organized really helps. And it is a good habit to embrace. Even if you don’t consider yourself an organized person; well, we all can learn. It is part of the journey. If you would like to start a home-based business, or to learn more about the one I'm involved in, just call me at 1-877-793-9205, or click on the green "contact us" button below. I’d love to help you get started!
---------------
Catherine Moran is a former hair stylist and now a very satisfied home-based business owner with HopeinaCan.com.