Stop Overpaying: Online Home Business Money-Saving Tactics!

byHowardJaros

2.8K followers

4 days ago

Running a business from home opens up money-saving options that working for someone else may not offer.

As an entrepreneur and business owner for decades, I also like to help people save money using tax-saving tactics they may not be aware of.

I wrote a post a few weeks back to start this idea of not giving away your hard-earned money.

https://my.wealthyaffiliate.com/howardjaros/blog/which-online-business-mistake-will-you-make

Running an online business from home opens up several potential tax deductions. While the specifics can vary based on location, income level, and individual circumstances, here are some standard deductions for online home businesses in the United States.

1. Home Office Deduction

You must use a specific area of your home exclusively and regularly for business to claim this one.

You may be able to deduct $5 per square foot for up to 300 square feet.

Or you may be able to deduct a percentage of actual costs (e.g., rent, utilities, insurance) based on the square footage used for the office relative to your home's total square footage.

I live in an RV and run my online business from my RV home. Do you think the IRS would believe that I have a designated area in my less than 300 square feet that I can claim as a designated area that I can deduct? Not likely! So, I don't go there (a recommendation from my CPA).

However, I do deduct RV mileage if I travel to a new location for business.

2. Internet and Phone Bills

Deduct the portion of your internet and phone expenses used for business.

If you use your phone or internet, calculate the business-use percentage.

3. Office Supplies

Items like paper, pens, printer ink, and general office equipment (e.g., mics, speakers, scanners, staplers, or folders, etc.) are deductible.

4. Business Equipment

For larger purchases like computers, printers, cameras, and other tech used for business.

Depreciation rules may apply, or you can deduct the full cost under IRS code Section 179 if eligible.

5. Software and Subscriptions

Deduct the cost of tools like Website hosting here at WA or domain fees.

Business-specific software (e.g., accounting tools like QuickBooks).

Online tools like Canva, Grammarly, or SEO research tools.

6. Advertising and Marketing

Deduct costs associated with Paid ads (Google Ads, Facebook Ads).

Social media management tools.

7. Professional Services

Expenses for professional help, like Accountants or tax preparers.

Lawyers for contracts or trademarks if needed.

Business coaches or consultants.

8. Educational Expenses

Courses, webinars, or certifications outside of WA that improve your business skills.

Business-related books, eBooks, or other online training platforms.

9. Travel Expenses

If you travel for business (e.g., to meet clients or attend conferences), deduct:

Airfare, car rental, gas, or mileage (keep a log!).

Lodging and meals (subject to specific per-diem rates).

10. Business Meals

Meals with clients or for business purposes.

Usually deductible at 50% of the cost, as long as business is discussed.

I love to go out and have a nice meal while discussing business-related progress and goals with my CFO (my financial officer).

11. Health Insurance Premiums

If self-employed and not eligible for employer-sponsored insurance, deduct premiums for yourself, your spouse, and dependents.

12. Bank Fees and Interest

Deduct fees for maintaining a business bank account or business credit card.

Also, don't forget interest on business loans or credit card balances.

13. Depreciation of Assets

Deduct the depreciation of business assets like furniture, computers, or other equipment used over time.

14. Business Insurance

As your business grows, costs for liability insurance, professional indemnity insurance, or specialized policies for your business, if needed.

15. Miscellaneous Deductions

Costs for freelancers or virtual assistants.

Membership fees for professional organizations.

Fees for payment processors like PayPal or Stripe.

All these items listed can add up to real dollars that can be deducted from your adjusted gross income to place you in a lower tax bracket. That's money in your pocket!

Please keep this in mind!

Documentation: Keep detailed records (receipts, bank statements, invoices) to substantiate deductions.

Separate Finances: it's best to maintain separate accounts for personal and business expenses.

Consult a Professional: Tax laws vary by location, and a tax advisor can help you maximize deductions while ensuring compliance.

Do you take advantage of some of these deductions? Feel free to share your tax-saving tips!