subject: Take A Break! Work From Home Opportunities [print this page] When I think of work from home opportunities, I see flexible hours, homemade lunch, and a comfy pair of jeans and a t-shirt. With the freedom and advancement of technology, it's become incredibly easy to turn that spare bedroom into a functional, savvy business office. Yet aside from the obvious benefits of working from home, there's actually a little known secret about home businesses; tax breaks. People who work from home have another reason to celebrate (besides being able to dress-down!), and it has more to do with itemized deductions than with a comfy couch! Whether you're a stay-at-home, work-from-home mom or a business owner, there's a good chance you qualify for a tax break.
The first criterion of qualifying for a home business opportunity deduction has to do with how often you use your home office. People who only use their home office once or twice a month will NOT qualify - you must be actively using your office for client interaction, administrative duties, and other business functions. Simply setting up a desk and computer in the spare bedroom won't get you a tax deduction. You must perform administrative duties in your office such as record keeping, scheduling, supply ordering, and billing. Your home office must be the primary place where these activities occur, and considerable time must be spent working in your home office. So if your home business meets these requirements, read on to discover what the next step is towards claiming a work from home deduction.
One of the greatest home business opportunities is location - generally speaking, your home office can be anywhere on your property. It can be in your garage, your spare room, or even your guest house. As long as it's the primary place of business, the IRS has approved any kind of detached structure to be acceptable as a home office. Because each situation is specific to each business owner, certain allowances can be made. For example, if you only own one computer which resides in the living room, it is not necessary to move that computer to the office. It's perfectly fine to use the computer in the living room as both your work computer and play computer, even though it's not located in your home office. The majority of business interaction needs to take place in the designated office.
So let's get to the point here: Deductions. What kind of wonderful tax deductions can home business opportunities offer? Quite a few! Painting, mortgage, utilities, rent, depreciation, repairs, and insurance are just a few of the things you can deduct if you run your business from home. However, before you start writing all of these things off, there's a couple of things you need to know. The annual income of your business needs to be greater than the cost of deductions; otherwise your deductions will be severely lessoned. Also, if you're planning on selling your home in the near future, excess tax deductions can cause piles upon piles of extra paperwork. That's not to say don't do it; however, just be prepared in case you ever decided to sell your home, which is now also your office. If you take the right precautions, you can avoid mountains of annoying paperwork.
If you're interested in work from home opportunities, or if you currently work from home and believe that you qualify for this tax deduction, you'll need to fill out an IRS Form 8829 and report deduction amounts on Schedule C. Additionally, employees of a home business will need to fill out a work sheet found in the IRS Publication 587, entitled Business Use of Your Home. Itemized deductions for home business employees are claimed on Schedule A. An employee can find a list of available deductions on pages 18 and 19 of Publication 587. With all of this in mind, you're ready to start deducting! Working from home truly does have its benefits; aside from working your own hours (most of the time!), wearing whatever you please (pajamas, anyone?), and not worrying about a time clock, working from home now has become a tax break. Read through the IRS guidelines and see if your home business qualifies!
