How Small Business Owners Can Deduct Their Home Office From Their Taxes

The home office deduction allows qualified taxpayers to deduct certain home expenses when they file taxes. To claim the home office deduction on their 2021 tax return, taxpayers generally must exclusively and regularly use part of their home or a separate structure on their property as their primary place of business.

Here are some details about this deduction to help taxpayers determine if they can claim it:

  • Employees are not eligible to claim the home office deduction.
  • The home office deduction, calculated on Form 8829, is available to both homeowners and renters.
  • There are certain expenses taxpayers can deduct. These may include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent.
  • Taxpayers must meet specific requirements to claim home expenses as a deduction. Even then, the deductible amount of these types of expenses may be limited.
  • The term “home” for purposes of this deduction:
    • Includes a house, apartment, condominium, mobile home, boat or similar property.
    • Also includes structures on the property. These are places like an unattached garage, studio, barn or greenhouse.
    • Doesn’t include any part of the taxpayer’s property used exclusively as a hotel, motel, inn or similar business. Read More
William Rogers

The Hack: Entrepreneurs are constantly being reminded, “Work ON your business, not IN your business.” The best way to accomplish that is through delegation. And the best things to delegate away are those pesky tasks that keep following your calendar around.

The SolutionUpworkFiverr, TaxConnections. These sites are the way to outsource just about anything you need done, from data entry cold calls, programming to tax, financial and business support.

The Benefit: When you first start outsourcing some of the busy work, you’ll be amazed at how much time you save yourself. That’s more time to work ON the business.

Payments Everywhere

The Hack: Cash flow is often the biggest challenge for small business owners. Maintaining a healthy flow of cash through the business is paramount. Getting your cash now, rather than waiting for a check, is a great relief to your finances. You started accepting credit cards. Now, process them wherever you are! This is great for on-site workers (think HVAC, Electricians, etc.), freelancers, and Events (workshops, seminars).

Read More

Are you a high-income small-business owner who doesn’t currently have a tax-advantaged retirement plan set up for yourself? A Simplified Employee Pension (SEP) may be just what you need, and now may be a great time to establish one. A SEP has high contribution limits and is simple to set up. Best of all, there’s still time to establish a SEP for 2017 and make contributions to it that you can deduct on your 2017 income tax return.

2018 Deadlines For 2017 Read More

If you’re a small business owner, then you know that gauging the performance of your business is one of the most difficult tasks you face. The indicators and measures that you work with on a day-to-day level are not necessarily reflected in the criteria and metrics that are provided on paper, and it’s hard to know what to trust and which information is best to use. It is essential that business owners have a reliable, understandable way to tell whether things are going well or need improvement, and that’s why using and understanding your Key Performance Indicators (KPIs) is so vitally important.

The value of Key Performance Indicators cannot be overstated. They are objective, black and white measures of all of your business processes and performance, and provide you with a clear and straightforward way of seeing what is working and what needs more Read More

The most effective way for small business owners to be sure that they are aware of their company’s financial status is to have an accurate balance sheet that reflects the most current information available. By keeping this information up to date every quarter, you can help yourself avoid a lot of problems and surprises down the road.

A balance sheet provides you with an at-a-glance summary of your company’s financial health as of a specific day. It is broken down into what the business’s assets are, what the business’s liabilities are, and the amount of owner or shareholder equity. The balance sheet gets its name from the fact that the assets must be balanced by and equal to the liabilities plus the equity. Some business owners have found current balance sheets so helpful that they update them every month. Read More

The biggest headache for small business owners is getting and staying organized. If running your own business sucks up your day, being successful is going to be that much harder for you.

Here are a few tips for you to form good accounting habits so your small business will run like a well-oiled machine:

Keep It Separate. Sometimes your business credit card comes in handy when paying for personal expenses. One may pay it back to the business but you actually have to record an accounting transaction. It is important to keep separate bank accounts and credit cards for personal and business expenses; by doing this you will better track your Read More

Payroll Compliance is a challenge that many small businesses struggle with. Payroll done by business owners themselves mean that they need to have the know-how to comply with the Internal Revenue Service’s strict rules regarding accurate reporting & deposits. Moreover, federal, state & local tax regulations change & many times without notice. Small business owners need to follow such changes keenly as well.

Having a professional as a trusted guide & advisor helps small business owners (SBO) navigate these dangerous waters. It also saves them time and costly errors. Errors which are due to late filing or deposit of taxes increase the risk of steep penalties & scrutiny from the Internal Revenue Service. Read More