Your home-based business is in a unique tax situation. Certain deductions are available to home-based businesses, but you must keep good records and determine the business portion of your home expenses. This article will help you learn more about home-based business tax deductions.
Before you start taking those tax deductions for your home business, you must meet the IRS qualification that your home is your principal place of business. This article details the IRS requirements and includes some examples to help you sort out this complicated issue.
The IRS has announced a new simpler calculation method for home office space deductions. You can deduct home business costs for the space used "regularly and exclusively" for your home business, using the old calculation or the new simpler method. If you have a smaller space, the simple method can save you time and mistakes.
Calculate your home business space deduction.
What expenses you can deduct for your home-based business.
Are you prepared for the IRS to come to your home to inspect your home business? The IRS wants to be sure you are not violating the requirement that your home office be used "regularly and exclusively" for business purposes. CPA Gail Rosen answers some questions about use of the home office for personal reasons.
Some other home based business expenses you can deduct.
You can deduct phone expenses for your home based business. Here's how.
To complete Form 8829, you will need to gather some paperwork related to home business expenses, such as costs for mortgage interest, property taxes, and home expenses. Here is a list of the information you will need.
To correctly calculate deductions for business use of your home, you will first need to use IRS Form 8829 to determine the deduction percentage.
Home based business deductions are limited. You can deduct home business expenses to reduce y our business income for the year, but you can't deduct these home business expenses if you had a business loss. Read the details on this limitation.
If you are looking for a home business opportunity, here are some things you need to know about tax schemes, to avoid IRS scrutiny.
A list of IRS-targeted home based business tax deductions to avoid.