I need to know what is tax deductable in a small home bussiness?
May 4th, 2010I am starting a home bussiness. And it looks pretty promissing. But i need to know 2 things. !) When do I get a license. And 2) What do I need to save for a tax deductions on the company and at home?
Replys
You need a business license before you start business. That’s an easy one.
As far as a business in your home, in order for the space to be tax deductible it needs to be for the exclusive use of the business. For instance, if you have only one computer in your home and you set aside a room for office space, but then you do all of your personal computing there, and you kids do their homework there, etc., it doesn’t qualify anymore.
Assuming you have set aside a space, you need to measure the space and you can deduct a portion of the rent or mortgage, utilities, etc. But the real key is keeping the business separated from your household. Then, if you get Quicken tax software or something, it will walk you through and ask you all the right questions to make the most of your deductions.
Ok, any expense that goes into the running of your business is tax deductible. Things like electricity etc, you need to work out the percentage of which is being used for your business, and claim that amount of the electricity bill, not the private amount. Licensing depends on the type of business that you’re wanting to start up. Why don’t you go to see a Business Enterprise Centre? In Australia the consults are for free and they can help you with any licensing, registration, costs etc…
Girl, there are so many things you can deduct on your taxes. For instance if you open a new phone line you could deduct that or if you make any home improvements, if you have to do any driving for your business you can write down your mileage and get that deducted. Anything AT ALL you have to pay for for this business you can deduct on you taxes just about. The best thing to do would be to contact your tax preparer.
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