Everyone is looking for the key to build wealth. Problem is most people are looking in the wrong place. You can build wealth right from home by starting your own home business. In fact, tax benefits for home businesses are the bridge from poverty to wealth!
Home Office-You can deduct some, even all, of the expenses of having a home office. This includes the square footage of the space as well as a portion of the utilities. Here are the qualifiers: You must have an area that is set aside as the main place where you conduct business-and that's how it must be used. So if you're looking to build wealth through a home business, set up a home office and dedicate the space for business use.
Mortgage Interest, Property Taxes & Insurance-Got a mortgage? Great! It can cut your tax bill and build wealth for you by reducing your tax burden. How much it lowers your taxes depends on the size of your home office-specifically, the percentage of the total space of your home. That percentage of your mortgage interest can be deducted from your taxes. And that same percentage comes off of your property tax and insurance bills, too, in the form of a federal tax deduction (Cha-ching! More wealth for you!).
Building Expenses-Any repairs and/or improvements you make to your home office can be deducted from your taxes (Do you hear the cash register ringing? Your wealth is growing!). Let's say you want to paint the room or put a door on so you can hear yourself think. Something like that is deductible in full!
Utilities, Phones & the Internet-For home utility bills, you can write off your home office's percentage of the total square footage of your home as a tax deduction (can you hear your bank account screaming "more wealth"?). With additional (not the first phone line, only subsequent ones) landlines and cell phone lines, 100% can be written off. As well, a percentage of your Internet service can be deducted also, leaving you with even more wealth!
Meals & Transportation-Business meals can be deductible if you take a client out and business is the topic of the conversation! If you have to travel for business, your meals can be deductible as well as your transportation to get there. In fact, traveling from your home to a client's location is a tax-deductible expense (the IRS has a per-mile reimbursement rate). If you are looking to build wealth using this tax deduction, keep good records of your car's odometer readings, where you went, and why. Always better to have too much documentation than not enough!
Other-A percentage of the cost of installing a security system-as well as the ongoing fee for having that protection-can also be deducted from your taxes, staying in your pocket and contributing to your wealth. Use the same percentage you used in figuring your mortgage interest, property taxes, and insurance. Also, a portion of your moving expenses can be written off, too.
As you can see, a home business allows you tax breaks that can act to seriously build wealth for you and your family. Do your due diligence, and get an accountant's advice when you file. There may be even more tax benefits than there was space to list here. And of course, you can't deduct more than the net profit of your business!
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