Owning a Home based business can have great advantages over working outside of the home. One huge advantage is the tax breaks that are offered to the owners. The government has many incentives for the owners who work in the home. They also offer many tax breaks to owners of businesses. Here are some of the Tax Deductibles offered and how they work.
One of the first breaks is that you are paying yourself instead of the government. When you work at home you do not have to pay for employee insurance and extra payments on 401 and business insurance. The government does not require you to pay for the health insurance for the whole company. This means that more money stays in your pocket and not in your employers pocket.
There are major tax breaks that you can take advantage of when you own your own company in your own home. One of them is your auto. If you take any trips in your car that have to do with your business, even if it is driving to the bank to deposit money, or driving to the post office for stamps or to send a fax, then you can claim these trips on your income tax as a deduction for your business. In fact even if you are going down to buy groceries and buy some printing paper for your business. Claim that trip on your income tax. Another example would be, you decide to take your family out for a nice dinner. As you are sitting at the table you notice that the waitress is really not enjoying her job. You strike up a conversation with her about working at home and at the end of the conversation you give her your business card. You can claim the trip to the restaurant as a business expense. In fact, you can claim the meal as an expense too. Which leads us to another tax break. Vacations.
Vacations to any destination with your family can be claimed on your business taxes if you include some kind of business action during the trip. For instance you take your family to a famous amusement park in Southern California. You just happen to have a client that lives not too far from your destination so you make arrangements to meet them for dinner while you are in town. During dinner you talk about the business. Guess what? You can claim the whole trip as a business trip on your taxes.
Another huge tax break, is your home office its self. Every state has some guidelines on what you can claim as a home office. You usually have to have a specific area in your home that can be enclosed away from the other areas of your home. But one of the things that alot of business owners do not think about is claiming their business equipment on their income taxes. If you made a purchase of a desk top computer that will help you to build your business better then you can claim that computer as a business expense. The printing paper that you purchased for your business? You can claim it as a business expense. Even your web server can be claimed as an expense.
These are just a few of the ways you can get tax breaks. There are hundreds of ways to save on your taxes by owning a business at home. A few pieces of advice I would give is to have an accountant who is familiar with business tax breaks look over you tax forms, and to make sure you keep all receipts so that you have proof if you do get audited.
Owning your own company in your home can give you a definite advantage on your taxes and keep more money in your pocket.
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