When you work at home, it’s easy not to think about the expenses that you incur by doing so. Sure, you may think about things like paper, printer ink and other office supplies, but there are many other costs associated with working from home that are tax deductible. As a result, you may be paying more than you have to in taxes, which is great for the government, but not so great for you. Here are some tax deductions that you may want to take a second look at. Some expenses are a little bit questionable, so be careful, but if they are legitimate expenses associated with your business, there is no reason that you should not take the deductions.
Start with the easy things first. Keep all of your receipts for office supplies throughout the year and use them as a tax deduction at the end of the year. This includes things like paper, pens, paper clips, staples, printer ink and even your handy pencil holder to hold all of these supplies. Of course, those are the small things, that will help you to get some tax deductions, but are not likely to go a very long way toward it. Don’t forget the big expenses as well. If you buy a new computer or desk for your home office, those are tax deductions, too. Filing cabinets may also be a tax deduction if they are used strictly for business. Don’t forget any computer software that you have to buy for your business as well. This can include things like Microsoft Office, antivirus software, and even bookkeeping software such as quickbooks.
If you have to have a larger home so that one room can be used as an office, this can be deducted as well, but this is where you are starting to tread in slightly more dangerous waters. Make sure that you are using your home office strictly as an office, and nothing else. If you put your child in daycare on occasion so that you can work more efficiently or go to meetings, this is also a tax deduction.
When you are filing your taxes, it is important to get all the money back that you can. There are a couple of things here that may raise red flags with the IRS, but as long as you have all the receipts and proof that you need of these expenses, there is no reason to worry if the IRS decides to do an audit. You only really have to worry if you do not have receipts or you are claiming expenses that you did not have.