Home Based Business Tax Deductions

Running a home based business reaps many wonderful tax deductions that other businesses some times may not claim. Unfortunately to many small business owners end up paying the government taxes every year because they are unaware or several small business deductions that are available.

Most of the time any expenses that are related to your business can be added as a deduction on your taxes. If you do not pay taxes through out the year, deductions can help you from paying a large amount of taxes each year and can also adjust earned income. Try to avoid paying large amounts of taxes or owning any money by keeping track of simple things!

Each business is a bit different so be sure to mention these ideas to your tax advisor or accountant to see if your business can qualify for these deductions.

1- If you join any business or purchase into any franchise, the expenses such as kits, or franchise fees may be claimed as a deductions.

2- Business Supplies. Be sure to save all receipts for any supplies you purchase for your business use. Computer paper, business cards, pens, catalogs, or any items you purchase and use for your business.

3- Advertising- Most advertising can be claimed on your taxes. Keep all receipts for any newspaper ad's you may run, or any advertising you do online. Advertising is a business expense and in most cases can be written off.

4- Items Given Away- Keep a list of any items you may give away, and the costs of these items. Most freebies may also be written off.

5- Phone bills and internet access- If you have a phone line for business use or have the internet in your home or office for business use, save all receipts for each bill paid. These items are business expenses and may also be written off.

6- An in home office- If you have an office in your home, make sure to let your tax advisor know. Using a room in your home as an office can also be added on taxes.

7- Long distance calls- If you make any long distance calls that are related to your business, make sure you keep all phone bills showing the calls and the amounts charged. If these calls are related to your work, the cost of the calls may also be written off in most cases.

8- Returned Checks and Bank Fees. If you incur and bounced checks from customers and can not collect on them, those amounts may be deducted, along with any fees you were charged from your bank. Be sure to keep the returned check, the letter from your bank and your bank statement to show the fee you were charged.

9- Postage- All postage costs paid by you or shipping fees may be claimed. Keep receipts for all shipping supplies, and postage.

10- Computers- If you purchase a new computer for business use, the cost of the computer may be claimed. You may also claim depreciation for 3 years after the computer was purchased.

About The Author

This article may be republished with the resources box included and links must be hyperlinked.

Tara Grant, owner of http://www.awomansresource.com and http://www.designbytara.com. Tara is a warm-hearted entrepreneur, mother of 2 small children and an avid networker in the wahm and parenting communities!

[email protected]

In The News:

Efficient tax design  Economic Times
Botcha ridicules TDP claims on taxes  The New Indian Express

Small Business Tax Deductions for Year End 2004

As a small business owner, it's wise to familiarize yourself... Read More

Tax Jokes and Quotes

Do you realize that some tax forms ask you to... Read More

Need a Copy of Your Tax Return Information?

Taxpayers have two easy and convenient options for getting copies... Read More

Tax Investigation - What You Need To Do

The knock on the door from a Tax Inspector is... Read More

What You Need To Know About Taxes If You?re Getting Married

It may not be high on the list of wedding... Read More

Six Urban Myths About Taxation

Six Urban Myths ? Taxation"I am proud to be paying... Read More

Tax Trap #4 -- The Quagmire of Depreciation

If you are a Small Business Owner or Self-Employed Person,... Read More

Taxation of Forgiven Debt: The 1099C & You

Often people fall on hard times and stop paying on... Read More

10 Thoughts on Tax Offer in Compromise

Beware of advertisements that claim to settle tax debts for... Read More

How To Get An Extension To File Your Business Tax Returns

Yes, the tax season is upon with the first filing... Read More

Are You An Innocent Victim of These Popular Myths?

Misconceptions, misinterpretations and just plain "untruths" are floating about income... Read More

Rental Property Tax Deductions

Own residential rental properties? This article discusses how income from... Read More

Corporations Failing To Claim AMT Exemption Overpay Taxes By $11,000

Does your incorporated business pay alternative minimum tax ["AMT]? If... Read More

SFR Substitute for Returns: IRS Action on Non-Filers

In the latest Star Wars episode, the evil empire executes... Read More

Truly Bizarre Taxes: The Tax on Illegal Drugs

One can never underestimate the enthusiasm that politicians have for... Read More

Identity Theft ? Impacting Your Taxes?

If your identity is stolen, your finances can quickly become... Read More

Fiscal Deity: Tax Consultant

Strategic planning throughout the year results in a minimal tax... Read More

Save Money on Taxes - Is the Only Way to Get Your Tax Savings is to Sleep With an IRS Agent?

Tilting the Tax Laws in Your Favor.In order to accelerate... Read More

Business Tax Loophole: Leasing Assets To Your Corporation

While there are many equally valid reasons to incorporate, saving... Read More

Requirements To Produce Tax Information (Whats Up With That?)

"What we've got here is a failure to communicate." ... Read More

Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make

NOTE: This is the first in a series of 5... Read More

Alas! In E-Commerce Taxland

In trying to comply with tax laws for your e-business,... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

Employment Taxes ? What Are They?

If you have employees, you are responsible for paying a... Read More

Are You Overpaying Taxes If You Use Tax Preparation Software?

For many business owners the answer to this quandary is... Read More