You know that working from home can be satisfying but did you know that it could also save you money? Beyond the obvious savings like commuting costs, clothing and such you can also take considerable savings on your income taxes.
Home Deductions
When you work from home, there are tax deductions that you can take for using your home for business. There are sometimes complex rules that govern the use of these credits. Let's look at some potential savings and a few of the regulations surrounding them.
- Office- If you operate a business from home chances are you have an office. You are allowed to depreciate the office portion of your mortgage or rent. Your office must be entirely separate from the rest of the home and be used exclusively for work and or meeting clients or patients.
If your office meets the guidelines, calculate the deduction by getting the percentage of space your office takes up. For instance, if your office is 20% of your home's total square footage, then you will be allowed roughly 20% of your mortgage as a deduction.
- Business Use of Home- In addition to the home office mortgage deduction you can also deduct repairs, insurance and utilities. This deduction is a little trickier as you will need to determine if it is a direct or indirect expense. The resulting deduction will be a percentage based on this information. It is important that you seek professional assistance as these forms and calculations can be complex.
More Deductions on Schedule C
While the deductions you can take for your home office can be substantial, there are also everyday business expenses that you can claim on schedule C.
- Supplies- Anything that you use exclusively for business can be deducted as an office expense. Paper, staples, envelopes, and even stamps can all be calculated on your schedule C. You need to keep good records and even receipts in a separate file. When you do your taxes, you may not be required to show them; however, you will need them for a potential audit.
- Advertising- Need to get the word out about your home business? Your advertising dollars are deductible.
- Employee Expenses- Obviously you can deduct your employee's wages, but you can also deduct employee benefits.
- Meals- Certain meals are tax deductible if they are work-related.
- Employ your Children- Are you giving your bundle of joy an allowance every week? Why not "employ" him or her and be able to deduct it on your taxes? This will mean they actually must do some work, empty the trash, and clean the office or if they are older file paperwork.
Anything that pertains to business that they are qualified to carry out is an opportunity for you to employ them. Not only are you saving money with your home based business, you are teaching your children a vital lesson about working and earnings. Money savings with a moral bonus; what could be better than that?
Working at home has many benefits; you have the freedom of setting your own hours and doing what you love. While you are in this pursuit of happiness, do not overlook the many ways you can save money. Uncle Sam has made many provisions to make it more profitable for the home based business owner.
Working from home is, for some people, the epitome of the American dream. You set your own hours, and you get to decide which twelve hours of the day are considered working. With the rise of the commercial internet, there have never been more opportunities to work from home and make your business thrive, particularly if you have a marketable skill that doesn't need a large advertising budget or office infrastructure.
However, there are some things to learn before going into business for your-self from home. Learn from the mistakes of others, you don't have time to make them all yourself.
First and foremost - if it sounds too good to be true, it probably is. Your mother told you this one when you were ten, and it's still valid now. Working from home is, well, working. You may be working on things you enjoy doing (like writing, or painting). You may be working in a field where you have a set of clients from a former employer, but it is, still, work.
You need to have the discipline to get up and go to the computer (or go to your home office) every single day, rather than sleep in. You need to be circumspect about making dates with clients and keeping them, or you won't have clients...and you'll be handling a lot of the administrative stuff that nobody really likes to do, like cold calling for clients, running the accounts receivables, and handling your own marketing and advertising.
So, anyone offering you a work from home business opportunity that promises you a six-figure income in your bathrobe...proceed with caution. There are careers you can do from home that can generate that sort of income but it still takes a lot of work and determination to reach that level; bestselling novelists, day traders, and affiliate marketers are a few that come to mind. However, you still need a certain level of skill, knowledge, and talent to make any of those ventures a success.
Set goals. This is part and parcel of having the discipline to run your own business from home - you need to set a daily and weekly goal, and then review whether you've hit it. One of the most important business skills out there is taking metrics - assessing what you've done, what you can improve on, and looking for ways your business can grow.
And lastly, be realistic about how much you can get done during the day. One of the hazards of working from home is that without the structure of meetings and deadlines to show what's going on, its way too easy to over-commit yourself, to take on more work than you can handle, especially if the work you do tends to all come in at the same time from your clients.
Working from home is a fantastic opportunity for anyone who considers themselves a self-starter. But with enough determination, even the biggest procrastinator can make a home business very successful.
posted by Chris Simpson
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Thursday, January 22nd 2009
If there is one thing you will see a lot of online it is work at home job opportunities. Advertisements are all over the place and you probably received at least one email this week promoting this very thing. You may have images in your head of clicking ads for pennies a day or some type of pyramid scheme; however there are real work at home careers out there. You simply need to know how to find them.
Telecommuting
Did you know that it is entirely possible that your current position could be done from your home? Many companies are finding that it is cheaper for them in the end if some of their employees do their work from home. They have lower overhead since there is no need to maintain an office space for you, you are a happier employee since you can go to work in your pajamas and productivity actually increases.
If you are not currently employed that is okay too. You will simply need to research and find companies looking for someone with your skill set to work from home. Believe it or not there are many companies looking for telecommuters and recently these types of companies have been highlighted in both major magazine and news programs.
A simple search online for telecommuting opportunities will put you on the right path. You can also ask locally. If you see a job advertised that you could do from home be sure and ask if it is a possibility.
Data Entry
A popular work at home job is data entry. While this may sound like a specialized field, it is simply entering information into a database or a spreadsheet. The latter can be a little more complicated but it truly is not a hard position. Some training may be required if the company has customized computer software but generally all you need is a computer with high speed internet connection.
Typing
Along the lines of data entry are various typing positions you could potentially do from home. A company could require you to create form letters, invitations or simply type reports from notes they have. Transcription service providers also need specialized training but this can be quite lucrative if you have fast and accurate typing skills.
Paid Online Surveys
Paid online surveys are a popular example of how people make money online while having fun. Marketing companies want some consumer feedback before they bring a potential product. Sometimes these surveys are about products or services that are already on the market. This can aid the manufacturers in making marketing, packaging, or product changes and they will pay for your opinion.
Subcontract with Multiple Companies
When putting together a work at home career, realize that you are free to work for more than one company. By combining a couple of part time work at home positions you could potentially make more money than you were when you were out in the work place. Just be sure to ask both employers if this is a satisfactory arrangement. In most cases it will be but every once in awhile you may find competing companies will not be comfortable with you working with the competition.
posted by Chris Simpson
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