The Tax Benefits Of A Home-based Business
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Pamela Upshur
Apr 21, 2010, 4:25:02 AM4/21/10
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Please consider this free-reprint article written by:
Pamela Upshur
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Article Title: The Tax Benefits Of A Home-based Business
Author: Pamela Upshur
Word Count: 518
Article URL: http://www.isnare.com/?aid=505343&ca=Business
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=505343
Easy Publish Tool: http://www.isnare.com/html.php?aid=505343
*********************** ARTICLE START ***********************
According to the U.S. Bureau of Labor Statistics, 4.12 million American entrepreneurs are operating their businesses at home. These home-based businesses include anything from home-based accounting firm to home-based food catering service and even to day care service. The advancement in telecommunication technology allowed the home-based business boom, which gave many individuals the benefits of a home-based business.
In general terms, there are two benefits of a home-based business: lifestyle and financial freedoms. Lifestyle freedoms include working hour flexibility, convenient working arrangement, etc. and financial freedoms include increased income possibilities and tax deduction opportunities. Many home-based business owners fail to exploit in full the tax deduction privilege given to them by the IRS in the conduct of their home-based business. So this article will focused on these tax deductions to help home-based business owners boost income.
Home Office Deduction
Don't think that since you're doing business at home, you're no longer entitled for home office deductions. Provided that you dedicate a single room entirely for the conduct of your business (meaning no other personal purpose as a living room), your initial and subsequent improvement costs for this room are deductable from your gross income.
Mortgage Interest, Proper taxes, and Insurance
If you're paying a mortgage interest for your house, a part of this mortgage (equivalent to the space percentage of your home office) is also tax deductable for your business. The same calculation applies toward the property tax and rent payment. And if you're paying home owner's insurance, you can also deduct some percentage equivalent to your home office from your gross income.
Utility and Transportation Expense
Although you can't charge your home's entire utility expenses, you're still entitled for utility expense deductions for your home office: business calls, light, water, cleaning, etc. If you commute from your home office to meet a client or do business, you're also entitled for mileage deductions. Keeping a log of your mileage and some proof of meetings are necessary for this purpose.
Furniture and Fixture
If you're buying furniture and fixture for your business space and use, then the expenses incurred are tax deductable for your business also provided that you would not use the furniture and fixture for personal family use.
To avail of these deductions, however, you need to keep records or proof of the expenses including the part of your home used solely for business. You must also prove that you have no other office or place you conduct business in except the one you have at home. These records of proof must be kept within 3 years from the date they were filed and 2 years after the tax was paid. The reason most entrepreneurs fail to avail of these benefits of home-based business is that they don't know what deductibles they are entitled to or they fail to keep records of proof. Know your full rights as a home-based business owner because the IRA would not lay down all these for you; be proactive to progress your business.
About The Author: Pamela Upshur is the owner of http://www.iprofitarticles.com Specializing in ghostwriting and article distribution. Visit http://www.iprofitarticles.com to learn more.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=505343
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Please consider this free-reprint article written by:
Pamela Upshur
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=505343
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=505343
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: The Tax Benefits Of A Home-based Business
Author: Pamela Upshur
Word Count: 518
Article URL: http://www.isnare.com/?aid=505343&ca=Business
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=505343
Easy Publish Tool: http://www.isnare.com/html.php?aid=505343
*********************** ARTICLE START ***********************
According to the U.S. Bureau of Labor Statistics, 4.12 million American entrepreneurs are operating their businesses at home. These home-based businesses include anything from home-based accounting firm to home-based food catering service and even to day care service. The advancement in telecommunication technology allowed the home-based business boom, which gave many individuals the benefits of a home-based business.
In general terms, there are two benefits of a home-based business: lifestyle and financial freedoms. Lifestyle freedoms include working hour flexibility, convenient working arrangement, etc. and financial freedoms include increased income possibilities and tax deduction opportunities. Many home-based business owners fail to exploit in full the tax deduction privilege given to them by the IRS in the conduct of their home-based business. So this article will focused on these tax deductions to help home-based business owners boost income.
Home Office Deduction
Don't think that since you're doing business at home, you're no longer entitled for home office deductions. Provided that you dedicate a single room entirely for the conduct of your business (meaning no other personal purpose as a living room), your initial and subsequent improvement costs for this room are deductable from your gross income.
Mortgage Interest, Proper taxes, and Insurance
If you're paying a mortgage interest for your house, a part of this mortgage (equivalent to the space percentage of your home office) is also tax deductable for your business. The same calculation applies toward the property tax and rent payment. And if you're paying home owner's insurance, you can also deduct some percentage equivalent to your home office from your gross income.
Utility and Transportation Expense
Although you can't charge your home's entire utility expenses, you're still entitled for utility expense deductions for your home office: business calls, light, water, cleaning, etc. If you commute from your home office to meet a client or do business, you're also entitled for mileage deductions. Keeping a log of your mileage and some proof of meetings are necessary for this purpose.
Furniture and Fixture
If you're buying furniture and fixture for your business space and use, then the expenses incurred are tax deductable for your business also provided that you would not use the furniture and fixture for personal family use.
To avail of these deductions, however, you need to keep records or proof of the expenses including the part of your home used solely for business. You must also prove that you have no other office or place you conduct business in except the one you have at home. These records of proof must be kept within 3 years from the date they were filed and 2 years after the tax was paid. The reason most entrepreneurs fail to avail of these benefits of home-based business is that they don't know what deductibles they are entitled to or they fail to keep records of proof. Know your full rights as a home-based business owner because the IRA would not lay down all these for you; be proactive to progress your business.
About The Author: Pamela Upshur is the owner of http://www.iprofitarticles.com Specializing in ghostwriting and article distribution. Visit http://www.iprofitarticles.com to learn more.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=505343
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com --
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