Guest post from Katie Conroy, AdviceMine
As a small business owner who works from home, you’re always looking for ways to save on your taxes. After all, filing taxes as an entrepreneur is complicated. If you have a home office, you can write off plenty of related expenses, from renovations to essential software for height-adjustable workstations like StanData. Here are a few home office deductions you might have been unaware of!
Choose the Right Business Structure
Before you start looking into home office tax deductions, you’ll want to explore other strategies to earn more tax breaks, like formalizing your business structure. By forming your company as an LLC early on, you can save on your taxes and protect your assets. Plus, you can tackle the whole process through an online formation service like https://www.zenbusiness.com/florida-llc/. This will speed up the timeline and ensure that you meet all of the requirements for LLC formation. As an added bonus, you can probably write off any fees – these costs will typically qualify as start-up expenses!
Invest in Renovations
Do you feel like your home office needs a fresh paint job? What about new carpeting? Or perhaps you need to fix a drafty window, replace an old, squeaky door, or install new lighting. You can write off home office renovations as tax deductions, so don’t hesitate to invest in the repairs you need! As an entrepreneur, having a clean, organized, polished space can help you stay focused on your projects. If your office is in need of maintenance, keep the receipts to report deductions.
Select New Technology
Whether you’re in need of a new printer, laptop, or headset, you’ll be happy to know that these tools for your home office qualify for tax deductions. While it’s still a good idea to look for deals and discounts on any tech, you can rest assured that you will be able to subtract these costs from your taxable income at the end of the year. You can also deduct other tech tools, like an external hard drive, a router for faster WiFi, a portable charger that functions as a backup power supply, and even accessories like smart speakers. In addition, you can deduct software you use for your business, including workplace wellness tools.
Deduct Essential Utilities
Yes, you can technically deduct your home utilities from your small business taxes! However, it’s not a straightforward deduction – Hurdlr states that you’re only allowed to deduct the portion that is directly used to run your business. You can deduct part of the cost of your water, electricity, internet, gas, and phone bills.
Use Accounting Software
When it comes to filing taxes, it’s a good idea to use the right tools. Otherwise, you might make mistakes that could cost you, like filing too late or failing to report some sources of income. If this happens, you might end up owing more money in the long run, so investing in helpful software is a smart choice. Plus, you can put your software fees down as a tax write-off!
Choosing accounting software with the features you need is key. Pacific Crest Group recommends looking for industry-specific accounting software that fits within your budget. Furthermore, working with a great accountant can reduce your stress during tax season! If you know any other business owners in your field, you can ask for their recommendations. They can help you identify other deductions that you might not have been aware of.
You couldn’t run your business without your home office. That’s why the expenses you incur for this essential space can qualify as home office tax deductions. With these tips, you’ll be able to save more money the next time you file your taxes!
Has your company shifted to a hybrid work model? StanData can help your employees stay healthy and productive! Request a demo through our website today.
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