Lower Your Home Business Tax Deductions

The IRS Man Does Not Need Your Money

April 15th, 2007, is the official deadline for tax payers in the United States. There are many ways that a business owner, freelancers, independent contractors, or any other home-based business can cut their tax payments to the IRS.

The following are just a few ways that home business owners, freelancers, and independent contractors can relieve their tax burdens. For those who have just started a brick and mortar style business, these same tax tips can also help lessen the tax burdens for you as well. 

Large Purchases Deductions

If at any time during the year you made a large purchase on a computer, printer, office desk, office furniture or any other purchase for your business, you will be able to use this expense as a tax deduction for your business. Beware however, that in future years or in the present tax season some items may incur a depreciation value and the item will not be able to be used as a full deduction. While this may seem unfair, any legal deduction is a good deduction no matter the amount when it comes to paying end of year taxes for your business.

Vehicle Deductions

There is a limitation on how much you can deduct for the amount of your vehicle for your business. The limitation of the vehicle deductibility is mostly geared toward the cost and depreciation of your vehicle. There are other types of deductions that you can claim that have fewer deduction limitations by the IRS. In order to take these other vehicle deductions, you will need to keep a detailed report. By keeping this detailed account of your mileage, you will have a deduction every year for your business and your vehicle. The standard deduction for mileage is 44.5 cents per mile in the year 2006. In order to obtain the mileage deduction amount for your vehicle you will multiply the amount of miles your vehicle was used for business times the 44.5 cents per mile to get your total. You may also be able to use the total amount of maintenance fees for your vehicle if the vehicle is totally used for business. If you use your vehicle for personal affairs as well, the maintenance fees will then be prorated.

In Home Office Deductions