The emergence of the internet has allowed more people than ever before to work from home. Many companies offer this benefit to save the cost of renting an office, but people who are self-employed can also reap the advantages of working from home. Unfortunately, self-employed people have a slight disadvantage when it comes to tax time because they are responsible for paying the entire amount of taxes they owe out of their own profits, while companies often cover a significant portion of this expense for their employees. However, working at home allows you to write off many expenses, which could result in saving you a lot of money at tax time. Here are 6 things that self-employed people can write off when they work from home.
If you have a designated workspace within your home, you can write off a portion of your monthly mortgage. Many people have an in-home office, while others are only able to dedicate a small corner to a workspace. Regardless of which category you fall into, the size of your workspace in comparison to the square footage of your home allows you to write off a certain percentage of your house mortgage.
While having a home office allows you to write off part of your mortgage, other aspects of running a business from home allow you to write off additional expenses. If you use your cell phone or landline for business, you can write off the cost of the service each month. If you use the internet for your company, you can usually write off part or all of the service costs. It is important to compare the cost of different internet providers, however, because you may find it more beneficial to pay more for high-speed service if you can write it off. Reading HughesNet internet reviews can help you determine which service provider is most beneficial.
If you work for yourself, you must develop a reputation for being an expert in your chosen industry. One way to do this is by participating in continuing education so you be aware of the latest developments within the industry. Whether you attend conferences or take online courses to participate in ongoing education, you can write off the cost of it because it helps you enrich your career.
Every office needs equipment to run efficiently, and your home office is no different. Many of the large-ticket items you need such as printers, scanners, computers and furniture can add up to be a significant tax deduction. However, it is important to remember that this rule only applies to equipment that is necessary for your business. You will be able to deduct an office chair and desk, but you won’t be able to write off additional seating.
Small office supplies are just as beneficial to your business’ success as large equipment is. From pens and pencils to write with to notepads, folders and binders to help you stay organized, most of the office supplies you purchase qualify for tax deductions. Similar to larger equipment, the supplies must be directly related to your business to be written off. Small decorations such as picture frames and paperweights will not qualify for a deduction, but file organizers and notebooks will.
Many self-employed people travel long distances to meet with clients. Whether you frequently drive across town for meetings or fly across the country to attend conferences, you can write off your mileage and airfare if you track it properly. You will be required to log the number of miles you travel, so you may not want to track it if you do not travel far or often. However, this can add up to be a significant deduction if you are a frequent traveler.
Photograph by Tranmautritam