There are many different things to know when you have your home based business, especially about taxes. Here is a great article from Calibrated Screen Printing about taxes.
“If you run a home-based business, there are many tax deductions available to you.
If you are a sole proprietor, meaning you have no employees and your business is not incorporated, the IRS offers you even more tax deductions. Knowing what these tax deductions are and claiming these deductions will help offset the amount of money you are required to pay in self-employment taxes. It will be very worth your while to keep track of your expenses and take advantage of these tax deductions.
Whether you prepare your own taxes or you hire a professional, it is wise to keep records and retain receipts for anything that qualifies as a deduction. Any deduction you can’t back up with a receipt, invoice or other substantial documentation will not be allowed in the case of an audit. Make sure to save your receipts for at least seven years, as advised by the IRS.
Computers, Software and Supplies
The IRS is very unlikely to question reasonable deductions claimed for office supplies and postage. You can legitimately deduct the full cost of computers, internet service and software only if they are used exclusively for your home business. Your accounting software, document programs, and any other software programs you use exclusively for your home business can also be legitimately deducted.
Research Materials
If you conduct research as part of your business, you may deduct the cost of these materials. This includes trade magazines in your business’ industry, reference books, or website subscriptions. The amount of money you can reasonable deduct on research materials without provoking an IRS agent’s red flag will vary on a case-by-case basis depending on how much money your business brings in and other factors. For example, if you bring in $1000 per month but plan to claim $800 per month in deductions for research materials, that probably will catch someone’s attention.
Business Phone Calls
Because your business phone bills can legitimately be deducted, it is wise to keep a separate phone line and/or cell phone for making business calls. It is much easier to simply keep track of the entire amount of a business phone bill than it is to keep track of each phone call as you make it and then do the math when the bill arrives.
Mileage and Travel Expenses
If your business requires you to drive to the library for research, to interview out-of-town clients, make delieveries, attend trade shows or other business related travel, you can deduct these costs on your taxes. The IRS allows a certain amount be deducted per mile for car travel, so keep record of your mileage. If you fly on business, save your receipts.
Use of Your Home
If you have a designated home office or otherwise use part of your home exclusively for conducting business, you can deduct a percentage of your mortgage or rent, as well as portions of your utilities, real estate taxes, and home-owner’s insurance. If you work out of your home but do not have an actual home office set up, this area can get a little iffy. Be prepared to justify your deductions should you be audited.
Health Insurance Costs
If you are a sole proprietor, you are eligible to deduct the cost of your health insurance premiums on your taxes. You are not allowed to deduct the insurance costs of your family members unless your family members are employees of your business.
If you have any questions, please contact me at getbrandedclothing@gmail.com, Branded Screen Printing & Design
Sometimes it’s really that simple, isn’t it? I feel a little stupid for not thinking of this myself/earlier, though.