Tax Deductions for Home Offices

by Glen Palo on December 14, 2011

Tax Deductions for Home Offices

If you use part of your home for business, you may be able to take tax deductions for your home office. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. The home office deduction is available for homeowners and renters, and applies to all types of homes, from apartments to mobile homes.

There are two basic requirements for your home office to qualify as a tax deduction.  The first requirement is regular and exclusive use which means you must regularly use part of your home exclusively for conducting business. For example, if you use an extra bedroom to run your online business, you can take a home office deduction for the extra bedroom.  Secondly, it must be your principal place of your business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

Generally, tax deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

There are additional requirements for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed above plus your business use must be for the convenience of your employer, and you must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.

If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home.  Publication 587, Business Use of Your Home, provides a full explanation of tax deductions for your home office. This publication also includes the requirements for qualifying to deduct expenses for the business use of your home (including special rules for storing inventory or product samples) as well as the types of expenses you can deduct.  Publication 587 also provides guidance on how to figure the home office deduction (including depreciation of your home), special rules for daycare providers, information on selling a home that was used partly for business, information on deducting expenses for furniture and equipment used in your business.

Please consult with your tax attorney or accountant with regards to IRS rules and regulations and your particular tax or IRS situation when considering tax deductions for home offices.  For more information, please visit MyTaxSaver.

 

Glen Palo
skype: glen.palo
571-659-8971
glen@bizlinkblog.com

 

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Cool Twitter Tip

by Glen Palo on December 7, 2011

Use hashtags in your Twitter tweets

What are hashtags? Hashtags are the # (pound sign) placed in front of key words in your Twitter post. For example #golf, #Ford or #marketing. Hashtags can be used for multiple words such as #golf #course or #GolfCourse.  

Why use hashtags?  Hashtags are used in the Twitter search function. If people want to find conversations about a particular subject in Twitter, they can use the key word to search.  Twitter search results will return conversations with the conversations that have hashtags attached to the key words.  If you do not use hashtags then your tweets are not included in the search results and you miss out on additional people seeing your tweets.  Check out hashtag.org which is a great resource for seeing what hashtags are currently popular.

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Do Not Let Your Hot Prospects Cool Off

by Glen Palo on November 25, 2011

Do Not Let Your Hot Prospects Cool Off

Every day in marketing and business is critical when it comes to hot prospects and prospecting. That prospect's information you receive today, could very well be in the hands of your competition tomorrow. That is why I cannot stress enough the importance of following up with your prospects once you receive them.

Leads have a short shelf life and do not age well.  They  are not meant to sit around pinned onto bulletin boards, taped to the telephone or placed in a tickler file. They are meant to be acted on immediately.

Most prospects' thought process is to shop around for a product or service, so they have put the word on the street that they are on the market for a particular product.  On the internet, they typically expect an immediate response, either an link to a sales page or an auto-responder email.  And if they provide a telephone number, they expect a telephone call.

If someone within your professional circle gives you a qualified lead, it is highly reasonable that the prospect has made several people aware of their interests in a product or service. Which would mean that their name and phone number is being passed around in more than one professional circle.

The timing on a lead is so important, the moment you receive the lead, pick up the phone and make contact with that person.

By not acting on a lead, you have two things working against you. One, you are allowing for your competition to get the jump on you, and believe me they will. Secondly, you are giving your prospect an opportunity to seek out somebody else.

Keep in mind, when someone gives you a lead, that someone is most likely giving your potential customer feed back. So that prospect will have your name, and know when the lead was given to you.  I do not think your prospect would appreciate a phone call three to five days after you have received their information. Even if they are still on the market for your product, you are not making a good impression.

Hot prospects are meant to be acted on. So the next time you receive one, do not hesitate, stop what you are doing, and contact that person.

 

Glen Palo
skype: glen.palo
571-659-8971
glen@bizlinkblog.com

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Why Multi-level Marketing is Not a Pyramid Scam

November 11, 2011

A comment many people make is the Multi-Level Marketing (MLM) business model does not work because it is just a pyramid scam. Yet, a number of large companies using the MLM business model are listed on the New York Stock Exchange and subject to U.S. Securities and Exchange Commission (SEC) scrutiny.  Companies listed include Avon,  [...]

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