Cut Taxes by Working from Home

Posted on May 6, 2009, 12:12 am, by Tax Guy, under Tax Help.

It seems that the government on every level is determined to get their fair share. There are a number of things that you can do to help you save on the amount of money that you have to pay each year in taxes.  Choosing to work from can provide a number of deductions that you might not have considered before.

Tax Deductions for Work at Home

  1. Household expenses – those costs that you would normally have to pay if you had a separate office are deductible for a percentage of the amount.  This includes electric, garbage, other utilities, cleaning and even supplies (like toilet paper, facial tissue or light bulbs).  Be sure to keep all receipts that pertain to the expenses.
  2. Mortgage interest costs – since you are “renting” your office space you are able to deduct a percentage of the mortgage interest rates that you pay.
  3. Electronics – any of the gadgets that you use primarily for your business (or only for your business) can be deducted.  This means if your computer is specifically for your work then it can be deducted on your taxes.
  4. Membership fees – those memberships, subscriptions or services that you subscribe to only or primarily for business are likely deductible.
  5. Repairs – upkeep and repair work on the home can be deducted from your work income based on a percentage (figured by dividing the square footage of your office space by the total square foot of your home).  If insurance pays for any repairs then it is NOT deductible.  Only out of pocket expenses can be deducted.

It is important to talk to a tax professional about the deductions that you claim on your taxes to reduce your tax bill.  It is just as important that you keep meticulous records in regards to any deductions that you might take.  Choosing to work from home could be an unexpected way for you to lower your tax bill and save money on taxes each year.

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