For many, business ownership has become a path to financial freedom. Home-based business owners can deduct things like a home office, telephone, Internet service and office supplies. When you start a business, the initial deductions may offer tax refunds, and as the business begins to make money, the continuing deductions provide financial freedom. A home-based business can bring you around $3,000 in tax savings [source: House Logic].
If you've ever thought about starting a business in the hours around your regular job, or you're a stay-at-home-parent with a great idea, starting a home-based business can make a lot of fiscal sense. The equipment you use for your business, and portions of the facilities and utilities, may be deductible. Just make sure you can prove to the IRS that you really have a business and are not just trying to write off expenses. If your side business never shows a profit even after several years, the IRS might flag you for auditing.