Home Based Business
Home Based Business – Tax Benefits
There are many benefits to having a Home Based Business. By far the biggest one is the tax advantages of operating a business from your home. I am able to take a portion of my operating expenses required to maintain my home and apply them as a business expense. Because I have a home based business and have one of my rooms set up as an office I am permitted to allot a percentage of my living expenses as a business expense.
Here is an explanation of what I mean. There are ten rooms in my house, one of them being a small office. Since I operate a Home Based Business I can take one tenth of my living expenses and claim them as a business expense. For instance one tenth of my electrical costs are considered a business expense. One tenth of my property taxes. One tenth of heating costs. I think you can see that the tax benefit just from having a home office can add up to a substantial amount. However your office has to be an office. It cannot be used for anything else except operating your business. So do not think of sticking a desk and calculator in your laundry room and calling it an office. It does not work that way.
A few years ago I had to replace the tiling and ridge capping of my house. One tenth of the cost was claimed as a business expense. I did not know you could do that but my accountant informed me that because of the home based business, any repairs done to the house would allow me to claim one tenth of the cost. The same thing occurred when a had to put in a new water and sewage line. It may only be ten percent but it can add up to a substantial amount.
You may find this as insignificant, even though it is a small benefit of having a Home Based Business, it still is a benefit. And as you start, out any tax breaks you can take advantage of can make a difference. Don’t start a home based business just for the tax breaks, but take advantage of all the legal tax breaks that are available to you. The income and freedom to make my own decisions are the reasons I have a home based business. It is the best thing I ever did. You can also. Just take action and find the right home based business for you.
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