Whilst working from home, via an online job, may have many benefits it also brings along the headache of having to deal with your own taxes. We all know that taxes can be confusing and that the process can take some time to get used to. However, as you are working from home, you may be entitled to some deductions that you didn’t know about. In this article, we will cover the tax deductions that you must have if you work from home.
Home office deduction / business equipment
A home office deduction is probably one of the most important deductions and one of the most well known ones. If you often find yourself working at home then it is recommended that you dedicate one area of your house exclusively to your work. If you then qualify for this deduction then your deduction is based on the square foot space of the area dedicated work in your house. Not only is there a deduction based on the square feet of your home work space, but also the things that fill it. You can get a deduction for the electronics that you use for your work too. This covers equipment such as: computers, printers, business tools and supplies. All of these can be claimed back on.
Mileage and travel expenses deduction and travel
If you are not quite so home-bound then you might need to think about your travel fees. You don’t need to worry too much about this because if you use a vehicle for your business then all of the costs associated with it are covered by the tax deductions – this includes both mileage and depreciation. Something that also goes hand in hand with travel expenses is also the accommodation expenses. If you aren’t going to go too crazy with what you try to claim the deduction on, if you can prove that it is for work then the basic things should be included. This includes basic things such as accommodation and some food costs (but not all). More details!
So we have already covered that when you work from your home office, you are allowed a deduction for the home office and also the equipment you use but you can also warrant a deduction for the utilities too. Utilities that can be covered by this deduction are the telephone and internet. However, you can only earn a deduction for this if they are crucial for the day to day goings of your business. Here it is recommended that you keep very detailed records of your call history as you are only entitled to the deduction corresponding to the part that has to do with your business. Not only does this deduction cover these but the basic household utilities such as water and electricity, if they are also needed to power your work at home.
So these are the deductions you must take into consideration when you work from home, they might make your brain hurt but they will make you bank account happy and it makes working from home just a little bit easier and more rewarding. For more details, visit: https://en.wikipedia.org/wiki/Tax_deduction