Are you getting all the benefits associated with owning a home business? Do you k now what you can claim on your taxes as business expenses?
How much of your home is devoted to your business can make a difference. Do you have an office or just a laptop on your kitchen table and do all your work on the computer? Maybe you have turned the guest bedroom into a production area or a place to store inventory. Perhaps you have a large workshop, or have a daycare that takes up a majority of your living space during business hours. The percentage of your house or property that is being occupied by your business and the amount of time the space is used for business will determine how large of a percentage of your monthly household bills, like you mortgage, utilities, internet, and phone, are used for business and therefore, can be considered costs associated with doing business. If you are unsure about how to determine the correct percentage and calculate your business portion of your expenses, contact your tax professional.
One of the expenses people often overlook as business deductions are their computer, again based on the percentage of time it is used for business versus the percentage of time it is used for other activities. Along with the computer can be your printer, ink, and paper that are used for business purposes. If you purchase a new computer or all-in –one or fax machine, the percentage will affect the deduction for the purchase as well.
Another often overlooked potential business expense is mileage, maintenance, payments and depreciation on your vehicle if it is used for your business. If you use the vehicle solely for business, then you will not need to calculate percentages, but if it is used for both business and personal, only appropriate percentages will be business expenses and you will need to keep track of your mileage, writing down your odometer reading January 1st every year, plus keeping a record of the mileage for each trip that is business related.