Home Based Business Tax Deductions You Don’t Want to Miss
February 25, 2018 | Written by: Sohail Afzal
Vehicle Use ExpensesIf you use your personal vehicle for business, you can claim the cost as a business expense when filing your tax return. This includes the money you use for fuel and oil, licensing and registration, insurance, car maintenance and repairs. If you borrowed money to buy the car, the interest on that loan can also be considered as a tax deduction. Other costs such as leasing costs and accident repairs may also count. Remember that if you use a car for business and personal use, you can only deduct a portion of the automobile expenses.
Office CostsThink about the items that you use at home to conduct your business because you can claim them as part of your business expenses. They include things like your laptop, printers, pens and paper clips you use at home for your business. However, you need to understand which assets are depreciable which means that they will wear out with time so you can only claim a portion of the original cost as a tax deduction. The amount that you can claim as a tax deduction typically depends on the type of asset or property it is.
Mortgage InterestIf you have a mortgage for the home in which you conduct your home-based business, you can claim your mortgage interest as a deduction so long as it meets the business use of home deduction requirements. For instance, the workspace must be your principal place of business and you must use it on a regular and ongoing basis.
Other ExpensesOperating a home business can mean spending additional expenses on heat, lighting, water, maintenance/repairs, telephone, and internet connection which are used for business purposes. But you can only deduct a portion of these expenses since you also use them for personal use at home. Also, whatever you claim as a business expense shouldn’t be claimed elsewhere. Make sure all purchases and any form of business expenses which you wish to claim are substantiated by the right documents. In most cases, a sales invoice, purchase agreement, receipt or voucher will do. [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
Sohail Afzal, CPA, CMA, MBA
Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.