Can household expenses and equipment be business deductions?
If you run a business out of your home, you can use the simplified home office deduction mentioned in the previous tip and also claim a portion of your home operating expenses, such as your mortgage payment, utilities and Internet and phone bill. You may also be able to claim equipment you use for business, including your computer, printer, phone, fax (does anybody still use those?) and office supplies.
Auto expenses may also be deductible if you use your vehicle for business. You cannot claim both the mileage deduction and operating expenses, such as maintenance, gas and insurance. So, talk with your accountant about the rules and how they apply in your situation.
Author's Note: 10 Tax Questions You Probably Didn't Ask
As I was writing this, I found myself reading more of the IRS website than I ever imagined possible. Much to my surprise, it's well-written. The information is clear, concise and generally makes sense. So if you have questions beyond the scope of this list, peruse the IRS site. After all, it's your tax dollars at work.
- Internal Revenue Service (IRS). "Frequently Asked Questions on Gift Taxes." Oct. 24, 2014. (Oct. 26, 2014) http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes
- Internal Revenue Service (IRS). "Simplified Option for Home Office Deduction." Aug. 19, 2014. (Oct. 14, 2014) http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Simplified-Option-for-Home-Office-Deduction
- National Association of Enrolled Agents. "What is an Enrolled Agent?" 2014. (Oct. 24, 2014) http://www.naea.org/taxpayers/what-enrolled-agent
- Porter, Jane. "10 Questions to Ask Before Hiring a Tax Accountant." Entrepreneur. Jan. 14, 2013. (Oct. 24, 3014) http://www.entrepreneur.com/article/225378
- Shandrow, Kim Lachance. "10 Questions to Ask When Working with an Accountant." Entrepreneur. April 8, 2014. (Oct. 24, 2014)http://www.entrepreneur.com/article/232841
- Shin, Laura. "6 End-of-year Questions to Ask Your Tax Advisor." Forbes. Dec. 10, 2013. (Oct. 26, 2014) http://www.forbes.com/sites/laurashin/2013/12/10/6-end-of-year-questions-to-ask-your-tax-advisor/
- Staples. "Top Ten Questions You Need to Ask Your Accountant about Tax Time." 2014. (Oct. 25, 2014) http://www.staples.com/sbd/cre/tech-services/explore-tips-and-advice/easytech-u/tax-articles/top-ten-questions-you-need-to-ask-your-accountant-about-tax-time.html
- TurboTax. "Tax Exemptions and Deductions for Families." 2014. (Oct. 26, 2014) https://turbotax.intuit.com/tax-tools/tax-tips/Family/Tax-Exemptions-and-Deductions-for-Families/INF12053.html
Many Americans don't think about their tax bills until the new year. But there are things you need to do before Dec. 31 if you want to pay less later.