Tax Deduction for Home Based Business Owners
Tax | March 18, 2010 at 1:24 amThis year, if you are a freelancer owning a business, you can save a huge amount, or precisely, reduce your deductible tax income considerably. Let’s have a look at some of the very common ways:
Office Space
As a freelancer, if you are using your home space for business, you are entitled to waive off your office space. The amount, otherwise, paid as rent or mortgage can be deducted from your taxable income. Thus, working a s a freelancer can earn you more than a regular employee. Also, a part of your renters or homeowners insurance is can also be deducted as non-taxable income.
Bills
Working from home means using personal telephone lines, internet, and other utilities. These expenses, however, can 
be deducted up to the amount used for commercial purposes. If you have a dedicated phone line or fax for your business, it can be completely written off.
Technology
Every business, these days, is run with the help of technology. If you purchase any technological equipments to start or enhance your business, it can be written off completely. These technology purchases include computer up-gradation, routers, printers, fax machines, pen drives, web cams, new computer, etc. Also, any software bought for your business is deductible.
Stationary
Expenses made on purchase of office supplies like pen, paper, files, chairs, desks, or, any other supplies that help you to conduct your business can be written off. Postage costs, envelopes and other external stationary costs related to your business can also be deducted.
Business Overheads
This category includes all other costs like incorporation fees, business cards, letter heads, etc.
Educational Fees
Any cost incurred to enhance your commercial skills can also be deducted. You can include training fees, seminar costs, subscription costs, varied courses, and any other fees that will help you make a better entrepreneur, under this category.
Online Fees
If you are a freelancer, it’s very likely you might have a website. The costs incurred to register the domain, website designing charges, and other maintenance costs are also deductible.
Travel Expenses
Along with traveling charges, you are also eligible to deduct numerous other expenses like parking fees, bus and train tickets, hotel room cost, food, office space rent, and also your laundry costs. Not all expenses, however, would be 100% deductible. Hence, it’s wise to consult a tax professional before filing these expenses.
Miscellaneous Costs
You can include every other type of cost in this category. You can write off your health insurance premium cost if you have paid it through your business; credit card bill if paid as business expenses; unpaid client bills, etc. It also includes tax consultation fees and tax software costs. Lastly, you are eligible to write off client related expenses like gifts or luncheons given.
Hence, it becomes quite important for a home based business owner to keep track of all the expenses made throughout the year. Also, consult a tax professional before filing your tax this year, to avoid any glitches.
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This article is so helpful to save a lot of money while doing business from home.
After reading this article I feel that even I should start running business from home
All home business person this article is for you. You have an opportunity to increase your business and your profits as well.
Soon everywhere it is going to be work from home scenario. Organisations are going to go totally mobile.
This way people will get good amount of savings in their A/C which will be helpful for their future.
People who are working from home has got many benefits from Tax rebate and because of this people are getting encouraged to work from home.