Why Home Business Owners Should Be Thinking About Taxes All Year Long

People who own and operate businesses based in their homes may have a lot of questions about taxes. It’s a much different situation in terms of deductions and write-offs for the home business owner than for employees or someone who owns a business that operates in a non-domicile. And that might make for a daunting experience for the home business owner.

What’s important to realize is that there are many tax advantages to owning a business located within your home. Many of the things that you might take for granted as amenities attached to the home can actually be beneficial come tax time if you also involve them in your business operations. But it’s important to keep an eye on the tax situation all year long, because waiting until February or March might be too late.

So you can look to AccuServ to ensure that your home business operates in a comfortable, climate-controlled environment. And then look to these tips for some great ideas for tax help.

Records Are Made To Be Kept

An audit is the last thing that a home business owner wants to face. But they can be avoided or endured if the person in charge of the business makes sure to write everything related to the business down and keep that paperwork where it can be easily accessible come tax return time. And don’t be afraid to think broadly in terms of what’s related to the business. Lunch with a client, a trip to a conference, even an internet line dedicated to a home office, all of these may be deductible. But if you don’t keep the necessary records, you run the risk of missing out on prime opportunities for valuable deductions.

Don’t Overdo It

What often leads to home business audits is when the owner tries to write off everything in sight, even stuff that is tangentially related to the business at best. A new desk that you use in your office space is likely deductible. But trying to deduct a new sofa in the family room because you occasionally take your laptop over there is not a good idea. Just try to use some common sense, and try to think about if the potential deductible is directly related to the business. If there is even the slightest gray area, it might be best to move on to something else and leave that item off the deductible list.

Get Some Professional Advice

The rules about what to do and what not to do concerning your home business come tax time can be confusing. It might be best to hire tax professionals to help you out. Yes, it’s an expense that you would save by doing the taxes yourself, but is it worth a potential audit? And maybe a tax pro could help you find deductions that you wouldn’t even consider, saving you money in the long run.

These are just some of the tax considerations you need to keep in mind for the business you run from your home. Just remember to get started early on your tax preparations to prevent big headaches later.

The post Why Home Business Owners Should Be Thinking About Taxes All Year Long appeared first on Home Business Magazine.

Source: Home Business Money

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.