Well… are you?
I’m sure you’ve heard or read by now that when you run a business from home (network marketing, affiliate marketing, direct sales, etc) you have certain tax advantages that your neighbors, co-workers, etc don’t have.
My question to you is, are you fully utilizing those tax advantages? And if you’re brand new to the whole work from home arena, do you even know what you have in your hands tax-savings wise?
Before I go any further in letting you in on the plethora of ways you can save money on your taxes, let me dispel an awful myth that I’ve heard through the years.
That if you’re just starting out to operate your business from home, you must be making a profit and you must do so in the first 3 years of business. And this is in accordance of being able to turn your everyday expenses into tax-saving deductions.
Simply, NOT TRUE! YOU DO NOT HAVE TO MAKE A PROFIT to claim certain home business deductions.
The truth is, all you have to do is show you are in pursuit of a profit or have the intent to make a profit and you’re good tax wise. Of course there is a little more to it as far as actually claiming certain deductions, but you do not have had to have made ANY money to do it.
Get this, when you run a business out of your home, there are times when you may have another opportunity to save money on your tax bill. How so? Well, let’s say you have to pick up your son or daughter from school or soccer practice, but you stop at Staples or Office Max to pick up some materials for your home office, guess what? That road trip is now a write-off! It’s imperative that you would record your odometer mileage from the time you left home till the time you returned home. That mileage called “standard” mileage” is 54 cents per mile for you to write-off. Cool right?
Another example, say you have two part-time jobs. Did you know you could deduct the mileage driven from your one job to the second job? And you don’t even have to have a business for that one.
Did you know that you could write-off a PORTION of the cost of your utilities or even your rent for a home-office you set up in that spare bedroom or den?
Did you know if you meet up with customers in your home and have a home-office set up that you could write off your landscaping? And according to IRS publication 505, even start-up costs in forming your new business is a tax write-off!
Here are some everyday expenses that could turn into deductions for you because of your wonderful home based business:
- own your home
- pay for gas
- make home repairs
- eat out
- stay in hotels
- have business only clothing
- use a printer for work
- use a computer for work
- subscribe to business magazines
- take road trips
- own a smartphone
- go on family vacations
- pay bank fees
- pay credit card fees
- own a used car
And there are many, many more expenses I could list in this article. You get it though right? Having a work from home business is a great advantage that you should not only build wealth with, but save thousands of dollars from having to pay Uncle Sam too.
Here’s a little tool I use to keep track of all my expenses and to stay compliant. It’s called TaxBot!