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Posts Tagged ‘Business Purposes’

Small Business Income Tax Deductions

November 11th, 2010

Owning a small business can offer many tax breaks and deductions at the end of the year. Most of these breaks and deductions will come directly from business related expenses.

Small Business Income Tax Deductions

Examples of small business tax deduction expenses would be:

 

 

  • Rent
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  • Business Travel Expenses
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  • Payroll
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  • Insurance
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  • Taxes
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  • Interest
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    Income Tax Deductions for Small Business

    You can also receive tax deductions for capital expenses.

    Examples of these expenses would be:

     

  • Equipment Purchases
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  • Property Purchase
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  • Repairs to Equipment or Property
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  • Depreciation of Equipment
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    Home Business

    If you are a new small business owner, chances are you may have a home office. You are able to claim a percentage of your home operating expenses that are used for operating your business. You would just divide up the amount of the home used for the business and take that percentage to take advantage of business operating deductions.

    Travel Expenses

    You may deduct all expenses for your travel as long as the trip was devoted entirely to the business. So if you incorporate personal travel with your business travel, you must divide up the amount spent for the business travel.

    You may also take mileage deductions for the use of your vehicle for business purposes. You can either deduct mileage or deduct the operating expense of the vehicle during business travel.

    In order to take these small business tax deductions they must either be a necessary deduction or an ordinary deduction. This means that an ordinary expense will some how relate to your business and a necessary expense is an expense that will be helpful to your business.

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    Advantages and Disadvantages of Working from Home

    March 19th, 2010

    Working from home is becoming increasingly acceptable. I work from home and I adore it. I don’t think I could ever toil at a salon again, but I must face the possibility that I may have to move my business into business premises if it keeps growing like it has in the last few months. Even if parts of my business move out of home, I’ll try to stay at home myself as much as I can.

    Times are changing and working from home, particularly for the self-employed or contract employees is becoming more common. It is pointless paying rent for commercial premises if it isn’t required. Working from home has many perks.

    You can work back late without getting into strife with your family. You can “drop into the office” anytime you like. You can get up really early if the mood takes you and put in a few hours work then go back to bed. But as a massage therapist, there is one feature I really like, all the tax benefits!

    You can claim some of your household expenses on your tax return. Based on the floor area used for business purposes, you can claim a portion of your mortgage interest, insurance, rates, water, electricity, maintenance and the bulk of your telephone bill as well as depreciation on the carpets, curtains, computer equipment and so on. At the end of the financial year you will be surprised by the list of deductions.

    You will also save on travel costs, wear and tear on your car and more importantly wear and tear on you, having not to deal with peak hour or public transport. Not to mention picking up approximately an extra one to two hours per day of work when you don’t have to travel.

    There is a downside to working from home. The first problem is family distractions. Kids home from school at three o’clock, a friend at the front door, phone calls for other members of the family.

    You also may not have the perfect workspace, or space may be limited. Work space is vitally important, you must have an area set aside purely for business, nothing else, just business. I have found that it’s best also if you can close the door on the weekends and at the end of the day so you can “leave work”.

    I think many of the attitudes of people that working from home is “unprofessional” have lapsed into history. The number of major companies that allow their workers to work from home via the internet has increased dramatically in recent years. “Outsourcing” has become a commonly used term and this has brought about a spate of self-employed former employees, most of them working from home.

    The other problem that many people working from home suffer is motivation and discipline. You must start work everyday just as you would if you were employed by someone else.

    Want to work from home in your own home based business for women? You can learn more about starting your own profitable and flexible business at home.

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