What You CPA Doesn’t Want You To Know About Home Business

What You CPA Doesn’t Want You To

Know About Home Business

home based business tax, home business taxes, home business tax savingsWell tax time is just right around the corner and as a home business entrepreneur I don’t like to pay taxes but I must.  Home business is an opportunity for one to get out of the rat race, say goodbye to that knuckle head boss and make our own way.  Even so, Uncle Sam stil wants his piece of the pie.   I should preface this article by saying I am not a CPA and you should check with yours to see the most tax benefits possible.  Chances are your CPA does want you to know about the tax advantages of owning a home based business and I’ll go into some of them here.  But don’t get left in the dark.

The number one way for the average american to pay less taxes without changing their lifestyle is to own a home based business.  Now you might be thinking, “Ron thats a bold statement, you sure about that?” I am and here is why.  There are a number of deductions you can apply on your tax return that you normally wouldn’t be able to.  And for you business owners out there say goodbye to FICA, employee taxes, insurance, and expensive health benefits.  If you have a home office you can actually write off that section of your house!  Heres some of the other things you can write off.

  • Section of your home
  • Property Taxes
  • Mortgage
  • Gas and Travel
  • Clothes
  • Any Advertising you do (best kind is free by opening your mouth)
  • Portion of your utilities

 There are many more deductions and savings you can get but those are some of the bigger ones.  Now if you qualify for the Home Office Deduction be sure to keep records.  Take pictures of your office and also measure the square footage of your office becuase thats the portion you will be able to deduct.   For example, if you live in a 4-room apartment and the rooms are approximately the same size and you use one room exclusively for your business you can claim 25 percent of your expenses (1 room divided by 4 rooms).   Another big help to ensure your getting the deduction is set up a seperate phone line, or just use Skype but buy a headset.  100% sure fire way to avoid any problems with the IRS and ensure your deduction is log your work hours in a schedule, pretty simple.  These deductions can be made on form 8829 in section A I believe. 

A home based business not only gives us freedom to live a lifestyle of freedom but is also incredibly rewarding.  The tax benefits in my opinion are just icing on the cake.  Now for a very select few home business you can write off your product as well.  In my business I can actually write off my product but also put it in the asset column of financial statements.  See the business I’m talking about here.

What are your questions about the Tax savings in a home based business?  Whats your opinion?  Leave a comment below and make it an awesome day!

To Your Success,

home based business leaderRon Gelok
908 399 5686
gelokron@gmail.com 

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About The Author

Ron Gelok

I'm a full time home based business entrepreneur. I love to meet cool people, God, Love to skateboard, go fishing, and water sports. Traveling is what I'm into and loving life. I'm here to empower ordinary people to do extraordinary things. The entrepreneurial gene runs deep inside me. I believe in abundance and taking control of my life and future.

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4 Comments

  • Diane Rosolen

    January 28, 2011

    Great article.

  • Mike

    February 4, 2011

    Great post, Ron. Another way to lower your taxes is to structure your business properly. As a home based business owner, you make all of those deductions that you listed and pay tax on what’s left over at the highest tax bracket in the IRC. By structuring your business correctly, you pay at the lowest tax bracket, receive liability protection, and are viewed as a serious business owner. We have tons of information on this topic that we will be posting on our website soon.

    I hope it is ok with you Ron if I post a link to our blog page entitled “Business Entities” so that you readers can get some basic information on what’s available and how using entities can help them keep more and protect more. Thanks again for this great article and I look forward to reading more of your blog!! Here is the link for some basic information on business entities:
    http://www.mysticinvestmentgroup.com/blog/business-entities

  • gelokron

    February 13, 2011

    hey mike sounds good to me, if you can help home business owners pay less taxes im always down for that haha

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