If you’re running a home-based business, have we got some good tax news for you! By popular demand, here are even more tax write-offs that are especially suited to home-based businesses.
Employing your kids
Being around your children can be one of the biggest lifestyle advantages of a home-based business, of course. And if you hire them to help you with your work, having your kids just upstairs from your office also can yield significant tax benefits.
Whether they do internet research for you or comprise your focus group for the toy you’ve invented, paying your kids a wage can represent a legitimate expense. “You just have to keep really good logs of what they’re doing, and when they’re working, to prove that they’re actually performing a function,” Rosenberg says.
And, of course, you can’t pay them any more than what the market wage would be for their tasks.
Processing your expenses
Both to keep financial tabs on your home-based business and to maximize write-offs, you should organize your records in two ways.
First, thoroughly document expenses while you’re making the outlays. Don’t lose track of a single penny. Get receipts for everything, every day, and stuff them in an envelope; or at least jot your expense and date on a piece of note paper.
Second, organize a thorough record of your disbursements . An off-the-shelf accounting software package works marvelously for this. And some home-based business owners hire a bookkeeper just for this.
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