Taxes are complicated and even more so for business owners. Although it is important to check with a tax professional to know which deductions apply for your business, we thought we would spread some tax season cheer and let you know of four tax benefits that might shed some new light on that dreaded April 15th deadline. And if you missed out on these benefits this year, chances are they will stick around for a few more years to come.
Home office deduction
If you use a home office as your “exclusive” place of doing business and conduct business practices there on a regular basis, then you might very well qualify for a home office deduction. For a space to be “exclusive,” it must be the only office for your business (no others elsewhere in the house or in another building) and the space must be used only for business. It cannot be used for non-business activities such as storage, playroom, etc. Using an office on a regular basis means that you run a full-time business out of that space.
Hiring your children
If you have kids under the age of 18, and pay them to work for your business, you might be able to write off their wages as a deduction, without you or your kids having to pay taxes on the wages. There are several stipulations. First, yearly wages for each child cannot be over $6,200. Second, the job must be reasonable for their ages (cleaning or stuffing letters, for example, not doing your taxes or running heavy machinery). Third, treat their positions like you would for any other employee — have a job description, pay fair but not over-the-top wages, keep a regular time sheet/hours worked record.
Cell phone use
If you are a small-business owner who uses your cell phone for both personal and business calls, you can actually claim phone expenses as a small-business deduction. The important thing is to obtain itemized lists of your monthly bill, if possible, so that you can prove your deduction if the IRS ever decided to do an audit. Also, another option is to get a separate business phone number, but have it routed to the same phone. It is much easier to show which calls were for business and which were for pleasure.
Health care premiums
If you are a small business owner who pays for your health care premiums out-of-pocket (cannot be pre-tax money) without any subsidies or tax breaks, you may be eligible to claim your premiums as a business deduction. This only applies to individual plans. If you are part of a group plan, you are not eligible for the deduction.
So, while we can’t do your taxes for you, My Annapolis Office can give you back the time and focus you need to get them done. My Annapolis Office is a full service office space provider that has everything you need to maintain a productive, professional environment for your business. Officing with us means you are able to focus on growing your business instead of managing your office. Our executive office suites, virtual office capabilities, live reception and phone service, professional meeting space, and many other amenities at prices you can afford set us apart from all over office space providers. Come see for yourself Annapolis’ premier choice for workspace solutions. To learn more, call 410-656-1600 or visit us on the web at myannapolisoffice.com.
Source: Baltimore Business Journal