Home Office Deductions: IRS Tax Debt? Use IRS Tax Deductions to save big
IRS Tax Deductions- Get Creative ! Most freelance and independent workers already know their work tools are tax deductible, but that's not the end of it. There are many unusual expenses that qualify for IRS Tax Deductions as well. And knowing what these are can save you thousands of dollars! Continue reading o learn about Home Office Deductions.
Giving Gifts: Do you give your clients special gifts? This varies from profession to profession. For example, some photographers give a free photo album to clients they shoot weddings for, or provide a free proof print. These qualify as business gift deductions.
Hired Help: So you work out of your home office. The supplies you use are tax deductible. But there's an issue if you're sharing your office. The IRS has a loophole that states if you share your office, the supplies will not be tax deductible. So if you and your wife share the business and the office, you cannot take tax deductions for the home office. But there is a way to get around this. Hire your spouse as your employee. By adding your spouse to your payroll you are keeping the office supplies tax deductible and opening doors for other tax deductions.
Home Office Deductions: Do you travel from your home office to another office? The travel expense is tax deductible. Don't get me wrong, the commute you take to work does not qualify. You only qualify if you drive from one work place to the other. For example, you qualify if your drive from your home office to your art studio. Subway and cab fares qualify for the deduction as well.
Helpful Materials: Do you have a subscription to helpful trade magazines? Do you rent inspirational movies to aid in your work? These helpful materials are actually tax deductible. But if you're an artist, it will not pay to get too creative about helpful materials. Even if you receive "inspiration" from having a new pool- do not claim it as a tax deduction.
Words of Caution: It's okay to think outside of the box to save money. And who would be better at it than independent workers? You march to your own drummer. But you still have to use caution about what you claim as business expenses. Keep it simple, only claim stuff related to your work. And if you aren't sure about anything you claim as a deduction, double check with a tax professional first.
