Top 4 Tax Ideas for Home Business OwnersThis may not be the right time or say may be too early to discuss about the tax. However, if you are getting some good tips to get your taxes right, then it is not a bad idea to note them down. This article may not be a replacement for a new CPA or tax accountant. But, it will keep you prepared for March/April of the coming year. It is always good to have a sound tax strategy as a business owner. Even if you own a home-based business, there are some good ways to get tax deductions. So, let’s get started with the ideas.

1. Deduction For Your Home Office

As a home business owner you may have to be more specific to get tax deduction for your home office. If you use a spare room, garage or basement as your office then it will not be difficult at all. To get a tax redemption, you will have to specify a space that you use solely for your business purpose and not for any other housework. For example, you cannot claim a desk and chair as your office accessory if you use it otherwise as well. But if you have a separate corner in a 400 sq ft room, suppose of 120 sq.ft that you use as the office then you can claim deduction. If you paint, modify or make any changes to that corner then it can be counted as “office expenditure”. For those, who started their business this year; we would like to inform you that now you can claim $5 per sq. foot for about 300 sqft of your office. It is not a red flag to claim the expenditure if you are legitimately claiming it. You can check Form 8829 about expenses that are allowed for using your home for business.

2. Utility DeductionAnother interesting thing to note, is that if you get the home office redemption then you can also get a portion of your utility bills deducted. Yes, they can be your electricity and monthly heating bills. You can also get a small percentage of your rent or mortgage deducted. This is perhaps, the best part, you can get upto 50% deduction of your broadband bill as business expenditure.

3. Home Office Expense DeductionOffice stationery that includes the ink toner, postage, paperclips and many other things are totally deductible. You have to mention that you need these for your business. In case, you purchased a new laptop, tablet or computer, it can be deducted as well. Office furniture is also deductible. Nevertheless, don’t expect complete deduction of the purchase cost for a tablet or laptop. You can claim around 50-60% as business expense. For this purpose, you can check, form: Publication 535 Business Expenses.

4. Deduction Of Your Travel ExpenditureSo, are you attending conferences? If you have you been doing so then you can get deduction of your transportation expenses. It can include your bus fare, plane tickets, taxis or rental car etc. You can also get a percentage of your lodging, tips and meal expenses deducted. Check out form: Pub 463 Travel for this purpose. Also, if you have taken your clients for lunch, you can deduct those expenses as well.

Some Final PointsRemember, if you are a sole-proprietor then you will have to pay self-employment taxes too. But in case, you own a LLC or S-Corp then this will not be an issue. Anyways, if you have any concerns it is always advisable to consult a CPA or tax professional. However, we hope this article has helped you to make a basic tax strategy for the next year.