Tax Benefits of a Home Based Business

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Like most of you , I run my internet business from my home. Does anyone have a really good source of the tax benefits of a home based business. I want to be able to take full advantage of those tax benefits from running a home business.

Thanks,
Mike
#based #benefits #business #home #tax
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  • Profile picture of the author laurencewins
    Keep every receipt. Keep an accurate record of all income and expenditure. I know tax is worked out differently in each country so I can't tell you how yours works but this will certainly help you get started.
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  • Profile picture of the author Karry
    Getting the advice of a CPA is your best source of tax advice whether you do your own taxes or not. A CPA can give you advice on how best to minimize your taxes in your particular circumstance.

    You can also read the instructions for Schedule C. It explains what you can and cannot deduct.
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  • Profile picture of the author GarrieWilson
    I deduct part of my cable/tv bill. Gotta keep up with trends.

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  • Profile picture of the author asiriusthoth
    Thanks for the post kindsvater. On the PDF the $50,000 example is a good one. Quite a lot of people do this, and a lot of CPA's recommend it. There is a fine line though, don't get greedy.
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  • Profile picture of the author thedanbrown
    Ya really depends on the country where you file your taxes. But most likely you can get some home expenses covered because you have a home office.
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  • Profile picture of the author Ntech25
    I agree with what every other member has recommended on this thread. Very important to find a room and make that the office and usually you can write off the square footage of the office, so pick the biggest room heh =).

    I been running my business from my home past 3 years in New York and it's nice to be partners with the man taking about 43% of my income so it's nice to be able to write some of these costs off.
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    • Profile picture of the author AffNinja
      Are you running a LLC or an S-Corp.?

      TO me S-corp. seems to be the best Home-Based Business structure because all you just simply pay yourself a reasonable salary just as you would in a corporate job according to your company net profit (No profit=no salary needed). Then, if you want to distribute the rest of the profit into your account, the money'll get taxed as Capital Gain, which is roughly 15%. Isn't America awesome!?
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      • Profile picture of the author OrangeBull
        Originally Posted by AffNinja View Post

        Are you running a LLC or an S-Corp.?

        TO me S-corp. seems to be the best Home-Based Business structure because all you just simply pay yourself a reasonable salary just as you would in a corporate job according to your company net profit (No profit=no salary needed). Then, if you want to distribute the rest of the profit into your account, the money'll get taxed as Capital Gain, which is roughly 15%. Isn't America awesome!?
        Not really correct.
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  • Profile picture of the author OrangeBull
    Well S-corps are taxed not at the capital gains rate, but the individual rate of the beneficial owner.

    C-corps are taxed separately from owners and their dividends are taxed at the capital gains rate.

    LLC's can be taxed as pass through with self-employment tax, or as an S-Corp, or as a C-Corp.

    LLC's generally have a two way liability shield that makes them better than corps.

    Just my two cents.
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    • Profile picture of the author AffNinja
      Originally Posted by OrangeBull View Post

      Well S-corps are taxed not at the capital gains rate, but the individual rate of the beneficial owner.

      C-corps are taxed separately from owners and their dividends are taxed at the capital gains rate.

      LLC's can be taxed as pass through with self-employment tax, or as an S-Corp, or as a C-Corp.

      LLC's generally have a two way liability shield that makes them better than corps.

      Just my two cents.
      As a one-person operation with say more than 100k profit a year, I think it's a hell of a lot better to make the numbers look good on paper with a S-corp and save as much money in the business as possible. I don't understand anyone who'd rather put the company on their own tax return and get shot with self-employment tax. When the fact is you can deduct almost everything in your everyday life if you know how to do it in your accounting, and your life expenses can be basically paid by all pre-taxed income from the company.
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  • Profile picture of the author Curtis2011
    Originally Posted by goldbear View Post

    Like most of you , I run my internet business from my home. Does anyone have a really good source of the tax benefits of a home based business. I want to be able to take full advantage of those tax benefits from running a home business.

    Thanks,
    Mike
    The basic idea of it is pretty simple: if you run your operations as a business, you can deduct business-related expenses before paying taxes on the revenue you used to pay those expenses with.

    If you run operations as an individual, you can't do that.

    I'm sure the specifics of it are more complicated, but I'm not knowledgeable to tell you about them.
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