Deducing Your Home Office Deduction
You’re filing your first federal tax return as a home business owner, and naturally want to take the home office deductions to which you are entitled. What you most definitely do not want to do is take a home office deduction to which you are not entitled, so you need to understand the difference.
The number one rule about qualifying for a home office deduction is that whichever part of your home you use as a home office must only be used by you and must only be used as a home office.
A Home Office, And Nothing But A Home Office
In other words, if your home office is in the den and you use it as a home office ten hours a day, but then flip the computer into game mode, or turn on the TV to watch the Tonight Show, bye-bye home office deduction.
The exception is that if your computer area in the den is used for nothing expect you home business–no games, kids in chat rooms, or listening to MLB–you can get a home office deduction equivalent to the cost of keeping that much of your den, say a space 4’x 6’–operational.
If you and your spouse each have a home business and use the same office, bye-bye home office deduction for both of you. You can get around this, if your home has the space, by having separate home offices in different rooms.
Every Little Bit Helps
If your 240-square foot den constitutes 10% of your 2400-square foot house, and your 24-square foot home office area constitutes 10% of your 240-square foot den, you can take 1% of your entire home expenses as a home office deduction.
It’s a good idea, just incase the IRS wants documentation, to take a time-stamped picture of your home office space, in case something happens during the year so that you have to move your home office operation to another area of your house. You’ll need to keep separate documentation for the different work areas if they are different sizes.
If you work for someone else and telecommute, doing your job exclusively from home, you can take a home office deduction, but you must be able to show that you do those jobs for your employer only at home and not at his or her facility. For more info see http://www.i-homeofficefurniture.com/Home_Office_Store on products and services.
If your home office computer accesses the Internet through your only home phone line, you may not deduct the cost of the phone line, because the IRS considers a home‘s primary phone line to be for personal use. But if you have added business features like a 1-800 number or call waiting to your primary phone line, you can take the cost of them as a home office deduction.
Your best bet, however, in understanding what qualifies as a home office deduction is to consult with a qualified tax professional. You can get started with IRS Form 8829.
Written by Ricco Richardson
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Business + Fun = Great Lifestyle
Every business should have a little fun scattered throughout the company. Enjoy your successes and learn to deal with your failures. Loosen up and start smiling… laugh a little… and the world will laugh with you. And if laughter is too big a step, smiling works perfectly – it cost nothing to give and when you do, you usually receive it back; Now that’s what I call a win/win situation!
Be silly occasionally, socialise in your industry, stay away from miserable people and learn to pace yourself. Stop doing any work you hate and outsource it. If you can avoid it, do not hire people that do not know how to have fun. If you already have members of staff that bring other people down, see if there is a legal way to let them go gradually!
Customers are the cornerstone of every business and they need some laughter in their lives. When your customers call you, sound happy to hear their voice. They might just call you more often. If you can find a way of making their lives just a little more pleasurable, they are much more likely to remember you when placing the next order.
If your employees have fun working for you they are more likely to be committed to your business goals. Encourage your staff to achieve more by making their working life energising and more exciting. Plan something unexpected, give little gifts and organise a day out. It doesn’t have to be during working hours…
People can sense the mood their boss is in. If you are not having fun running your business, how can you expect your customers and staff to feel motivated? If your business bores you… sell it!
Some people believe that they are not allowed to have fun when they are working. Times have changed and some business owners now work almost every single waking hour, 6 days a week! When are you ever going to have time to have some fun if you are working all the time?
Did you know: It takes 7 muscles to smile and 14 muscles to frown?
I used to work for a company in Dundee many years ago. They spent quality time organising events for their members of staff. They inspired me to work harder knowing that the company did care for my welfare.
This business was inspirational in the way they used fun and games to allow us employees to see a different side of management. It was great being able to beat my boss in a fun environment playing amusing games!
A few words of warning; watch how you handle young, immature members of staff as they might not be able to handle some fun and keep on working at the same time. Also avoid alcohol and gambling as a means of adding some fun in business. Going down this route could potentially create more problems than the fun it serves to bring!
Work hard and play hard… add a little fun… and enjoy the rat race!
Written by Ricco Richardson
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