Copyright (c) 2010 Kathy Pleasance

The Trick is Don't Delay, no 'putting off until tomorrow'. Start gettin things organized Now.

The key to a successfull home based business deductions is simply keeping accurate records and being able to verify all entries. With starting your home business you most likely are a little intimidated with having to submit a tax return and the chance of getting audited. Simply follow these guidelines and rest assured that filing your next tax return will go smoothly.

Get some kind of an accounting ledger booklet. Better still open up an exce spreadsheet, simply label, expense or income.

Franchise Expenses: If you have a monthly affiliate, make sure you claim that.

Phone Bills And Internet Access: If you have a phone line for business use or have the internet in your home or office for business use, save all receipts for each bill paid. These items are business expenses and may also be written off.

Long Distance Calls: If you make any long distance calls that are related to your business, make sure you keep all phone bills showing the calls and the amounts charged. If these calls are related to your work, the cost of the calls may also be written off in most cases.

Business Supplies: Be sure to save all receipts for any supplies you purchase for your business use. Any items such as paper, ink cartridges, folders, business cards that you purchased and use for your biz.

Computers: If you purchase a new computer for business use, the cost of the computer may be claimed. Depreciation for 3 years on your business computer may also be claimed.

Postage: This one is often forgotten, any postage cost or shipping fee may be claimed.

Advertising: You can claim most advertising on your taxes. Keep all receipts for any newspaper ad's you may run, or any advertising you do online. A major business expense is advertising and can be written of.

Labor Expenses: All salaries that have been paid to friends, children or others for work done are a deductable expense. Make sure that payments are reasonable to avoid any problems in case you are audited.

Utilities: If you have a room in your home that is used only for your internet business and nothing else, you will be able to deduct a portion of your utilities. I especially like this because I have to have these things anyway with or without the internet business and now they are tax deductible. Allowable deductions range from garbage pick up, long distance calls, electricity and gas. Be sure that you keep your payment receipts in your accounting ledger or spreadsheet.

Entertainment Expenses: I don't have too much to deduct in this category, but several times a year I will meet a potential client over dinner. Keep track of your dinner expenses, including tips...this is all deductible also.

Car Expenses: Keep track of your mileage, keep a spreadsheet in the car and anytime you are using it for work, write it down.

Education: Attending trade shows, conferences, conventions, any cost of journals, software, or web subscriptions may also be claimed.

Travel: The percentage and eligibility of deduction depends on whether your trip was deemed to be business-related exclusively (100 per cent) or partially (50 per cent). Best to keep receipts and discuss with tax advisor.

Income: In addition to all your deductible expenses, you will also need to keep track of any money that you make with your business.

To summarize, be sure that you can veriy all your deductions by keeping records of paystubs and bills. Just in case you are audited, you will be organized and ready. Total up each category at the end of the year and take the entire booklet or excel sheet into your tax preparer.

Every business takes time to become successful, don't give up, it takes time.