Wall Street Journal Subscription Home

Federal Tax Deductions

Tax Benefits you can claim from your Home-Based Business

You are probably familiar with the fact that claiming federal tax deductions is one of the best ways to lower your tax bill. However, there are yet more ways that you can take advantage of federal tax deductions that you probably were not aware of. If you own a home-based business then you may be missing out on some of the tax deductions offered. Since your goal as a home-business owner is to strategize on how to take advantage of these tax benefits, it would be wise to consider how to go about it. Before starting up a business, there are a number of considerations that can be taken towards this goal. Consult a tax accountant or an attorney and try to find out how you can benefit as a sole proprietor from what the state has to offer in tax deductions.

The Wall Street Journal Subscription Keeps you in the know with timely business information. LIMITED-TIME OFFER: Subscribe Today to the WSJ and Save Over 80% Wall Street Journal Subscription for 80% off!

Of course some of the most obvious tax benefits you can have as a sole proprietor is being able to file your own taxes and thus saving a lot of money that would otherwise go to hiring an accountant or an external audit to do it on your behalf. But what about federal tax deductions? How can you benefit from these? It is possible to claim a percentage of your expenses by verifying with an accountant or the local tax office.

Some of these include mortgage, rent, telephone, internet, home insurance and electricity. Some of these expenses may add up to offer you huge federal tax deductions that can save you and your business a lot of money. In addition to the above, consider indirect expenses that you incur in the process of running your business. These may include such things as meals and entertainment that are business related, your home business tools like the computer and printers as well as the advertising costs incurred whether online or offline. These are federal tax deductions that you should be taking advantage of.

However in order for these federal tax deductions to be approved, the IRS requires that your business space be reserved exclusively for principal business activities. It should also be an exclusive space that you use to meet your clients for business purposes and that it is also the space that you use for your normal daily business activities like making and receiving phone calls and book work. Home based businesses are great tax shelters and the above expenses can be used by a sole proprietor to legally claim for federal tax deductions.

WSJ Subscription Wall Street Subscription   Get The New York Wall Street Journal delivered to your home or office 5 days a week.    PLUS included in your price you'll receive the WSJ Weekend Edition, delivered on Saturdays to an address of your choice. Insights, Ideas, Penetration, Vision, Perspicacity