Wednesday, February 15, 2012

5 Tax Tips for Your Home Based Business

There are over 4.34 Million Home Based Businesses in the US and the number is growing. Families have found that it's a sufficient way to make ends meet, supplement or even replace incomes.

Whether your a seasoned Home Based Business Owner or Brand New, Here are 5 Tips to help you with your Taxes during this Tax season.

5 Tax Tips:
  1. Consider the Home Office Deduction. If you use a portion of your home for business you may be able to deduct that area on your taxes. Generally the amount of the deduction depends upon the size of the space you use to conduct your business.
  2. Deduct Traveling Expenses. Once your home is established as a place of business you are then able to deduct mileage as you leave your driveway. Be sure to keep a record of the mileage you have driven. My accountant gave me a special car log for doing just this.
  3. Keep all receipts that are related to your Home Business. Everything from your computer, Internet, phone bill, paper, pens, shipping and all other items that you use to conduct business.
  4. Set an appointment with your Tax professional early. They tend to get very busy during this time of year and it's less stressful to have your taxes done before April 15Th.
  5. Things to remember to take with you for your Tax appointment:

The Basics - Last years tax return, SS#'s of everyone to be included on the taxes along with their birth dates, Amount paid in state and local taxes in 2011.

Forms - All W-2s, 1098, 1099 or Schedule K-1, records of personal property tax or closing documents.

Income and Investments - Other income not related to your above forms (hobby's, alimony, etc.), Expenses related to your investments.

Charitable Donations - Amounts donated to house of worship, schools or other charitable organizations. Records of non-cash donations. Number of miles driven for charitable purposes.

Deductions and Expenses - Number of miles Driven for Medical purposes, amount paid for health care, records for children in higher education, employment related expenses, job search expenses, Records of Alimony paid, moving expenses, student loan interest paid.

Be sure to contact your Accountant as they know your specific needs.

Cheers!

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