You are fortunate enough to run your own small Internet business, and you do so out of your home.
You get to make your own hours, you have no commute and you are your own boss. However, sometimes income can be sketchy and inconsistent, and maybe your credit isn’t where you really want it to be.
You worry about money, car loans, and all the things life brings.
However, you can work your home business to your tax advantage by making sure you are deducting as much as possible each year. This in turn can be used towards helping your financial situation.
What Do I Deduct?
First of all, let’s take a look at what you should be deducting if you run a home Internet business:
1. You can write off your workplace – This can be tricky, so make sure you stay within parameters, which do include the space and utilities, as long as the space is dedicated to business. Be sure you do not claim unrelated expenses.
2. You can write off equipment – Again, keep your deductions in the parameters, and you can deduct your office furniture, computers, phone and other technical equipment. Make sure it’s business related, though; your cat’s scratching post that you keep in your office won’t cut it.
3. You can write off the Internet and phone – If you use the Internet and have a separate business dedicated phone, you can deduct that. You probably can’t deduct your entire Internet bill, as you and your family probably use it for non-work reasons, but you can deduct a percentage. And as long as your business phone is a separate work related line, you can deduct that.
4. You can write off a business car – If you have a vehicle that you solely use for work, say for deliveries or contract work, you can deduct the cost of that.
5. You can write off entertaining clients – If you happen to entertain your clients with say, dinners our or baseball games, you can deduct the cost of that. Make sure this doesn’t turn into abuse and you end up taking buddies out to lunch. This can be a red flag to the IRS.
So now that you’ve got a handle on what you can deduct, what can you do with that tax return?
As the following article looks at, for one, tax returns and bad credit card loans can work together to pay off some of a high interest loan or for a down payment if your credit is low.
A bad credit car loan can cost a lot and with a generous down payment from your tax return, you can take care of some of that.
You can also invest it back in your business or pay off bills. If your credit is good, reward yourself with a great vacation or save it for a rainy day.
Make sure you follow IRS guidelines and don’t take advantage of your work situation.
You may be pleasantly surprised at what you find you can deduct and what it does to your tax return.
Photo credit: Image courtesy of Arvind Balaraman at FreeDigitalPhotos.net
About the Author: Heather Legg is an independent writer who covers topics related to working from home, small business and social media.