In this video we are going to discuss some home business you can start today (2021). If you’re looking to start on your journey of entrepreneurship and financial freedom we’ve got you covered!
The perks of a home-based business are many: freedom, independence, tax advantages … yes, tax advantages. Here are some tax advantages that your home based business may qualify for.
1. Home Office
The home office is one of the best-known tax advantages for a home based business, and for good reason. You can deduct a percentage of most household bills (mortgage or rent, utilities, property taxes, insurance, phone and Internet bills) based on the percentage of your house that is represented by your home office.
It’s important to accurately calculate the square footage of your home office, and if possible, to devote a separate room to your home office. IRS publication 334, Tax Guide for Small Business, is helpful in determining details on home office deductions.
2. Office Expenses
Any improvements or repairs to your home office are deductible as business expenses. For instance, if you paint your home office, the costs are deductible. However, these improvements must be related to the office itself. Landscaping expenses, for example, are not deductible, even if they are for landscaping outside of the home office.
3. Business Expenses
Many home based business expenses are tax deductible. A partial list includes:
tax preparation fees for your home based business
education expenses for classes you take to improve your business skills
software purchased to use for your business
traveling and meal expenses related to business (check with the IRS for specific guidelines on deduction limits)
transportation used for business purposes – you can deduct mileage traveled for business at a per-mile amount
4. Other Expenses
All the items you need for your business – beads for your jewelry business, fabric for your dressmaking business, a computer for your tutoring business – are deductible as business expenses. Depending on your type of business, these can add up quickly.
5. Family Employees
Hire your responsible teenage son to keep inventory for your business, or your teenage daughter to walk dogs for your dog-sitting business. This results in an additional business expense deduction for you, as well as income for your child. Be sure to document all the hours worked by family members (or any employee you hire) in case you are ever audited.
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