Home based business deductions are something that is a wonderful thing when tax time comes around. Not only do you get the freedom to work out of your own home but you also get home business deductions when you claim your taxes.

When you file for your yearend you should always be honest and reasonable. If you try to cheat the system will send up a red flag to the IRS and end up getting you audited.  The goal is to save more money not to create more problems. It’s important that you know your tax laws and all of the rights you have as a business owner. Just because you need to be honest doesn’t mean that you should not take the deductions that you’re able to take. Make sure that you stay organized and keep a record of everything you’re going to be claiming. Having the proof is the most important thing should something get flagged by the IRS.

There are several types of things that can be deducted:

• If you have a room specifically dedicated to your office in your home this is a deduction, keep in mind this doesn’t have to be a full room just the space that is dedicated square footage as these are home related expenses
• Mortgage
• Rent
• Insurance
• Electricity
• And so forth

Keep all the receipts that you use for office supplies as these can be deducted as well as any furniture that you purchase for the home business. You can also do the same with the home office equipment. Most of these are 100% deductions.

If you have to drive for your job you should keep track of your mileage, parking charges, toll charges, etc… as this is also a deduction. Should you lease your vehicle payments can be a deduction. If y9ou own the only thing you can factor into a deduction is the interest on an outstanding loan for the year.

If you have to travel the hotel, dry cleaning and car rentals are going to be 100% deductions. Food is at 50%.

There is so much more to the list it is wise when you’re starting your home business to talk with a tax professional to find out all of the things that can be deducted as well as any nuances, etc… to make sure you’re keeping track of everything that you need and are doing so directly. This is free money back for you so it’s more than worth the time.