Self-employment offers many benefits, including setting your own schedule and a comfortable working environment. It also has several tax-related benefits that you can take advantage of when it is time to file. Here are just a few expenses that you can potentially use to claim deductions on your income tax return.
Since you are working at home, you are using utilities throughout your work day. As a result, you can take a percentage of your utilities costs and use it to determine if you qualify for a deduction. Utilities encompasses everything from your electricity and water to the Internet.
When it is time to file, you have the option of taking the simplified optional home office deduction. The deduction would allow you to deduct $5 per square foot of your home office. Alternatively, you can opt to itemize your utility expenses and aim for a higher deduction. The simplified option has a cap of $1,500.
Deducting business clothes might seem like a strange idea, but the Internal Revenue Service does allow you to include the clothing in your itemizations if the purchase meets certain criteria.
In order to claim the related expenses for business clothing on your income tax return, you have to prove that that clothing was required to perform your job and that it could only be used for work. For instance, if you operate a daycare in your home and wear a certain uniform for the job, you can claim the expenses on your return.
Setting up your home office is important to ensuring you have a dedicated space to work in at home. What you might not realize is that the IRS allows you to deduct the expenses related to the setting up of your office on your tax return. The deduction can apply to the furnishings, such as the desk and chair.
It can even apply to the decorations that you use in your office. Artwork, paint, and other steps you take to make your home office a pleasant environment in which you can work are deductible. As long as you are using the space solely for your business, you can deduct the expenses
There are other expenses that you might be able to claim due to being self-employed. Talk to a professional tax service to get help with reviewing your business-related expenses and to file your tax return with all of the deductions you are allowed.Share