Think about how much you paid in taxes this year – most of us think of that dollar amount with a pained face. Yes, it’s too late for this year’s tax savings, but not too late to plan for next year.
Having a part time or full time home based business can get you a sizable tax break. You will need to review the federal as well as your state laws for the specifics and the percentages allowable for each type of deduction.
- The percentage of your home that is totally dedicated to home office is deductible as well as the amount of utilities for the home office.
- Your computer, phone, fax, office furniture, lamps, rugs and repairs to these items are all items to keep track of to decrease your tax liability.
- Your small office supplies like paper and ink for your printer and fax, paperclips, pens/pencils, note pads are deductible home office expenses.
- If you live in a snowy part of the country and pay to have your driveway shoveled a percentage of that fee may be deductible as you need to move your vehicle out to work as well as the family car. [If your home office is 20% of your home, you could deduct only 20% of the snow removal.]
- When you have a home office and you leave it to perform a job related service work mileage begins at your home office and ends at your home office – no commuting miles.
- Some states and municipalities offer “Homesteading Tax Breaks” which will give you a sizable break on your local property tax, provided the percentage of the office space vs living space is not to high. This enables you to save at the local level for your property as well as the state and federal level for your income tax.
Keeping good records of all expenses for a home office can save you lots of money at tax time whether your home business is part or full time. So what are you waiting for start file folders and collect your receipts.
But before you start squirreling away your receipts – make sure you have a home business. A business that you can start with 8-10 hours a week and then grow from there would qualify you for these tax breaks. Check this information for a doable home business with lots of information, training and mentoring to help you get started and grow. Click here.