When you own an internet business you will have multiple tax benefits. People tend to forget this or they do not even think there would be that many write offs with owning a home based online business. However, there are many to consider! If you start an internet business before the year ends, you will be able to write off your initial business start up cost on your taxes this year!
When you conduct business out of your home you are able to take deductions on your personal tax return that essentially reduce your tax liability. The information contained in this blog post is meant to make you more aware of the tax deductions that are available to online business owners. This is an excellent benefit for every business owner!
Home Office Deduction
Since your internet business will be home based you have the opportunity to take a home office deduction for the area in your home where you conduct business (principal place of business). If you meet the requirements then you can calculate a percentage of your rent or mortgage, insurance, utilities, interest, improvements and repairs. The IRS has an excellent guide on how to claim the Home Office Deduction.
The mileage used to ship packages, purchase office supplies and travel to trade shows are a few deduction examples. Fuel costs can also be deducted. Be sure to check with your CPA on the standard mileage deduction.
All expenses for business trips can be deducted. If you travel to visit with vendors, customers, collaborators or trade shows you would be able to write off the travel expenses associated with them. Note that for meals you get a 50% deduction.
The tax deduction you can take during the start-up year is a major benefit to owning your own business so please talk to your CPA about how to claim it.
A few other deductions are phone and internet expenses, office supplies, education and health insurance.
All of the deductions mentioned above are available to those who operate an online business. By owning your own business you are able to take a tax advantage and reduce the amount of income that is taxed. For a more detailed analysis please contact a CPA or Accountant.
Disclaimer: The information contained herein serves as a brief overview of the tax deductions and benefits for online business owners. Before taking any of these deductions please talk to your local CPA.
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