(disclaimer: always check with your state and tax preparer to verify deductions you are allowed to take)
Whether you own your own company that you operate out of your home, or if you are in Direct Sales or MLM, there are many home business tax deductions you are entitled to take.
It is best to track these monthly, however use a method that works best for you.
With this I want to share a tip from SuccessFactory.com
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Subject: Organizing for the New Year – Tax preparation tips
From all of us at The Success Factory, to all of you – Happy New Year!
Don’t you just love turning that calendar page from December to January and seeing the gift of a new start? I know I do.
Our family has had at least one child in college every year since 2001. And so because of that, we have fallen into a very good rhythm of getting our tax records in order as close to January 1st as possible in order to fill out financial aid forms. It has turned out to be a good habit. I’m sure you will agree that your memory of the specifics regarding your business and family finances for the past year is much fresher in January than if you are working to reconstruct things on April 14th.
So, today, on your TO DO list; get your 2010 off on the right foot by closing down 2009.
Transfer all of your files for the past year into a banker’s box. Start a file for the mail that will begin coming in that is marked “For Tax Purposes” (statements of giving, statements from interest paid, etc;).
Start all new file folders for the coming year so that as you begin to accumulate this year’s bills, statements, and as you begin to do your parties for 2010 you are ready to go.
Here are the categories that will help keep your filing system organized for this year if you don’t already have a system that works for you:
· January – December: set up one file per month for your orders
· Advertising ( yellow pages, internet ads, classified ads, business cards, logo items, etc;)
· Auto expenses (gas, repair, oil changes, insurance, lease payments, car washes, etc;)
· Product Cost Allocation (products used or given away but not sold)
· Override Commissions (if applicable – depends on your career plan – bonus money paid out from your team)
· Office Expenses and Supplies (printing costs, paper, envelopes, rubber stamps, etc;)
· Business Supplies (catalogs, sales fliers, order forms, etc;)
· Travel (Air, Bus, Cab, Train Fares and Lodging costs)
· Meals and Entertainment (includes conventions, recruiting appointments, out-of-town business expenses)
· Wages, Casual Labor and Outside Services
· Bank Charges and Bank Statements (includes check printing or money order fees)
- Continuing Education (Seminars, Meetings, Conferences, Conventions)
· Postage and Shipping
· Telephone (including cell phone bills)
· Credit Card Transactions
· Credit Card Statements
· Business Gifts
· Miscellaneous Receipts
· Child Care (Provider’s Name, Address, ID/SS# required)
· Home Office Expenses (Insurance, Repairs, Maintenance, Utilities, Yard and Lawn expenses)
· Medical Expenses
· Interest Expenses (Mortgage, Loans, etc;)
· Taxes (Personal property; real estate)
· State Income Taxes
· Business books, periodicals, dues and subscription costs
Close out 2009 by totaling all your expenses in each category, so that you are ready to present your numbers to your tax preparer. By doing this now while 2009 is still fresh in your mind, you will save yourself a big headache when you file your income taxes.
Copyright 2009 by The Success Factory All Rights Reserved
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I'd like to add in a few not mentioned on the list... Home Office! If you have any 'area' in your home that is dedicated to your home business, be it an extra bedroom, closet, nook or cranny; as long as that area is for exclusive use of your home business, you may make a tax deduction for this space.
Basically to figure the area take the square footage of the space (or combined square footage of the spaces) divided by the square footage of the home and get a %. You may deduct this % from your mortgage/rent, electric, gas, water, etc...
Also internet cost, web hosting and more. ANY expense you invest into your home business is tax deductible! Always ask your tax preparer to help guide you in the right direction. I highly recommend you find a small business CPA to help you as they are familiar with the rules and regulations for home business and can guide you on the method that will work best for you!
Alethea Anderson
Deducting!
