Owning a home-based business gives you tax write-offs that you don’t have as an employee.
Home-based businesses offer anyone interested the opportunity to make money on a full-time or part-time basis right from their home! But did you know that on top of making money, owning your own home-based business could SAVE you money as well? This benefit comes in the form of some pretty significant tax write-offs.
Most people have heard of tax write-offs and how large businesses use them, but don’t make the connection that small and home-based businesses are entitled to them too.
Examples of Home-Based Business Tax Write-offs
- A portion of your rent and mortgage is tax deductable.
- Insurance, heat, hydro and property taxes can also be deducted.
- Office supplies, paper, printer ink, pens, etc can be tax write-offs
- Costs associated with meeting with potential or existing clients (meals, entertainment, travel)
- Track the percentage your vehicle is used for business and that portion of your fuel, maintenance and insurance can be deducted
- Some of your monthly cell phone and internet costs are also deductible
- Computers, scanners, printers and other equipment used for business gets depreciated and the depreciation amount can be written off. This included software purchased.
- Even subscriptions, if related to your business, are tax deductible.
A good accountant or the tax revenue service can help you with all these tax write-offs to your new home-based business. *
Scroll down to watch a short video on how you too can take advantage of these tax savings.
Lets look at a simple example
Two people both earning $40,000 per year through full-time employment; however one has a home-base business.
Even though these aren’t real numbers, the tax benefits of having a home-based business are clear. Person 2 pays less tax even though they earned $1500 in their home-based business.
In many cases the tax saving alone are enough to cover the costs of starting a home-based business. Also the higher your tax bracket the more tax benefits you realize.
The benefits of owning a home-based business are plentiful on their own; tax benefits are just the icing on the cake that helps eliminate the fear of putting in your own money into starting up a home-based business!
* Home-based business tax write-offs differ from country to country so check with a local accountant, tax specialist or tax office for what is acceptable in your country.
Watch this short video with Sandy Botkin, CPA and author of “Lower Your Taxes” on the tax benefits of having a home-based business (Click here).