Spending money in your home business should always be a tax write off!
As I contemplate putting my taxes together again I am stuck with weeding through hundreds of emails I have saved this year in an attempt to find receipts for stuff I bought and payments received or commissions I might have earned.
What you need to realize right away is that “Spending money in your home business should always be a tax write off.”
It really does not matter what you buy, as long as you are investing money into your business, you should be able to appy that towards your taxes.
I would highly suggest that if you did not keep records from last year, that you come up with a system of doing that this year and in the future.
I simply have a folder in my email accounts that I save any email relating to a purchase or profit so that I can be able to go through the mass much easier than having to go through every single email still in my account.
I will most likely go through them anyways, but wanted to share with you things that you should be presenting to the tax accountant working with you to make sure you get the most out of your business and are not paying taxes to the government when you should instead pay yourself first.
This is a suggested list from what I use in my business and should apply, though it is not an absolute list. Be sure to check with a CPA, or cetified public accountant o verify based on your situation. (NOTE: An LLC might get taxed differently than a self proprietor for example so make sure you know you have the best arrangement for your business)
What you should keep records of as expenses for your business:
- web hosting (monthly)
- domain name purchases (yearly)
- Autoresponder/webinar conference rooms (monthly)
- Courses you have purchased for education
- Conferences you have attended
- Meals purchased at conferences
- Hotel/car rental/Airplane tickets for conference
- Miles Driven to a conference to to buy supplies
- Stamps/Shipping/Postage
- Stationary/Envelopes/packaging material/boxes to ship materials
- Cell phone bills (most likely a percentage will be used here)
- Home heating bills such as gas/electric
- Internet service bill
- Magazines/Books purchases in your niche for education
- Membership fees and or assocition dues
- Advertising online and offline
- Sample products purchased to use as demonstations
- Products sent out as samples to build business (may be considered as samples)
What you should keep records of as profits for your business:
- Payments received from personal products sold
- eBay sales
- shipping fees received (if registered as separat through paypal etc.)
- Commissions recieved through affiliate sales
As you can see, you need to make sure that you are keeping good records, especially if you want the government to see you as building a legitimate business and not someone trying to just funnel money into their bank account.
If you have any other suggested items to be aware of, or a tax horror story, please leave a comment below on your experience with business taxes.
The smarter you are with business taxes, the more money you are going to be able to keep for yourself.
Dave Gardner
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