10 Easy Home Based Business Tax Deductions

How would you feel if you could put an extra $2,000 to $5,000 dollars back in your pocket each year? Don’t be mislead by the savings claim above, it’s going to take some effort on your part, but the ROI of running an organized business and tracking your business expenses is huge and extremely rewarding.

Follow along and I’m going to show you how you can save thousands of dollars in tax write offs this year alone. Let’s get started..

Tax Deduction #10 – START UP COSTS

tax deductions small business owners -startup costs

Did you know that the IRS allows you deduct up to $5,000 of your start up costs in your first year of business?

All home based businesses have a start-up cost. The average business costs between $70 to $1500 to start. So instead of looking at your new business as a risk, you need to change your perception and see it as an investment and as an asset.

Tax Deduction #9 – TRAVEL EXPENSES

tax deductions for a home based business -Travel Expeenses

If you travel for business, your travel expenses are partially deductible. While you can deduct 100 percent of your lodging and mileage expenses, you can only deduct 50 percent of the meals you purchase.

You can also deduct the cost of dry cleaning or laundry, baggage fees, taxi or Uber rides and tips to pay for services related to your business travel.

Tax Deduction #8 – OFFICE SUPPLIES & EQUIPMENT

how to calculate business tax deductions -office supplies and equipments

If your office space takes up 10% of your house, you can deduct 10% of your bills for utilities, homeowners insurance, homeowners association fees, security, and general repairs and maintenance. Mortgage interest and property taxes are deductible expenses if you qualify for home office deductions.

Office expenses can also include electronic equipment, such as a computer, printer or fax machine. Office supplies also can include printer ink, paper clips, paper and staples. You can deduct up $2500 in furniture, such as a desk or chair, which is considered office supplies if the item is used solely for the business.

Tax Deduction #7 – CUSTOMER GIFTS

lawn care business tax deductions -customer gifts

As the saying goes, a happy customer is a loyal customer. And when it comes to keeping customers happy, what can be better than a thoughtful gift? Next time you come to a major holiday, a client’s birthday, or a special anniversary or milestone in your business relationship, consider offering a small token to your favorite customer.

Business gifts are a tax-deductible expense but special rules do apply. The IRS states you can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year.

If you take a client to a sports game or if you buy a client tickets to an event but don’t go yourself, you can treat it either as a gift or as entertainment expense and deduct 50% off instead; it’s your choice.

Tax Deduction #6 – EDUCATION & TRAINING

tax deductions for construction business -Education and Training

Whether it’s in person or online, as long as you can show that the training is necessary for improving or maintaining skills needed for your business, you can deduct the cost of education and training for either yourself or your employees.

Keep this in mind the next time you consider the cost of an industry conference or other networking event; it may be easier to justify these expenses if you know they’ll help to reduce your business taxes.

Tax Deduction #5 – VEHICLE

small home business tax deductions -vehicle

Business purposes include driving from your place to another work site, to meet with clients, or to go to a business meeting.⁣

The IRS is very fussy about writing off the cost of vehicles, so if you plan to take a vehicle deduction it’s essential to keep a detailed log of your business miles and other expenses if you want to write them off, too. I suggest that you pick up a vehicle expense log at an office supply or stationary store and keep it in your car.⁣ There are also several apps that can help you better track your vehicle expenses.

Tax Deduction #4 – INSURANCE

tax deductions for cleaning business -Insurances

⁣⁣It’s always nice to get a tax break for something you have little or no choice about paying. Since it is mandatory to have health, car or even home insurance, you might as well write a percentage off on your taxes. ⁣

Health insurance is a big ticket item for most small business owners. Fortunately, the IRS lets you write off all medical or dental expenses that are more than 10% of your adjusted gross income (AGI) for any given year.⁣

Your auto insurance deductible can be written off, or deducted, from your taxes, under certain circumstances. Your car insurance premium is tax-exempt only if you use your car for business. ⁣

In the case of home owners insurance, those who use a portion of their home as their primary place of business can write off an equivalent percentage of their homeowner’s insurance costs.⁣

Tax Deduction #3 – MEALS

construction business tax deductions -Meals

Taking a client out to dinner is not only a great way to build a relationship with them but also a great tax deduction. The IRS allows businesses to deduct 50 percent of meal and beverage costs as a business expense.

In addition you can cater a luncheon, provide meals for company meetings and write off the meals you purchase for your team (people who are employed by your business) at 50%.

Tax Deduction #2 – FEES

closing a business tax deductions-Fees

There are many fees you can deduct each year on your taxes. Keep good records and keep your receipts in order to get money back. Some fees to consider are the following.⁣
⁣⁣
Banking Fees⁣
Credit Card Fees⁣
Postage Fees⁣
Parking & Toll Fees⁣
HOA Fees⁣
Accounting Fees⁣
Consultant Fees⁣
Legal Fees⁣

⁣Those little 49 cent stamps can total a lot of dollars over 12 months. You can write off all postage-related charges, such as stamps and postage created by postage meters. ⁣

Costs associated with shipping companies like FedEx and UPS also count, and if you rent a P.O. box for your business you can include that fee, too. But costs of shipping inventory to customers can only be written off if the customer is not charged for shipping and handling.⁣

Tax Deduction #1 – ADVERTISING COSTS

ADVERTISING COSTS

Businesses may deduct all ordinary and necessary business expenses,

Advertising is a broad category of business expenses that includes business activities such as:

Advertising in various media like newspapers, TV, internet, cable, and magazines.
Marketing activities such as direct marketing.

Promotional and public relations expenses, like sponsorship of sports teams and promotional items like mugs, caps, t-shirts, and pens.

Online activities such as email newsletters, pay-per-click advertising, and SEO services
Costs of producing advertising materials such as business cards, brochures, and web pages.

Costs of advertising events such as a publicity campaign or special promotional event.

Summary

Armed with this new found knowledge, you can implement these home based business tax deductions and start saving money immediately.

 

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