If you have a home-based business in Massachusetts, there are a few tax tips you should know. Knowing these little tricks will help you save hundreds or maybe thousands of dollars in tax money, and it is completely legal. You should not pay the IRS more than you are required to. There are plenty of home-based tax deductions at your disposal.
It is often said that one of the great benefits of having a home business is the number of tax deductions you can claim. However, write-offs are a surefire way to attract the attention of the IRS. Regardless, having an experienced CPA in Needham, MA will help you do things legally with no fear of penalties.
Tax deductions for home-based businesses
- Home office expenses.
If you have a home business, it is likely that you have a home office as well, from where you conduct all your business-related activities. You may be able to deduct utility and mortgage costs for that office. However, there are two qualifications you need to meet: your home must be the only place of business, and secondly, you regularly work from that particular space.
- Equipment expenses.
If you need to update or buy home office equipment, you should do so without worrying about taxes. This is because any home-business-related equipment expense is 100% deductible. However, there is an upper limit to the amount, and you must use this equipment regularly and primarily for your business. You cannot buy something for your house and use it sometimes for your business.
- Travel expenses.
Any businessman or woman may need to travel for business purposes, even if they have a home-based business. If you need to go out of town for a business meeting or event, you can claim tax deductions on your mileage, airfare, hotel expenses, and transportation services.
- Professional fees.
As a business owner, you may need to consult with certain financial professionals, such as accountants or maybe a lawyer. The fees you pay for consultancy are deductible as long as the consultancy is for your business. For example, if you pay a tax preparer to do your taxes or a lawyer to go over a business agreement, you may be able to write off some part or the entire fee.
- Business insurance.
You own a business; of course, you will have business insurance. You may be able to deduct premiums for your business insurance, including employee medical plans, malpractice or liability, and workers’ compensation insurance.
The best way to ensure you are maximizing deductions for your business without breaking the law is to need the assistance of a professional. Hire a CPA in MA today!