GlobalGrind’s financial coach, Lynn Richardson, wants to help you make 2013 better than 2012 by helping you learn how to get your money back when you properly document your expenditures and maximizing your tax refund.
It’s that time of year again — tax season — and depending on how well you are informed and how well you keep records, this can bring anxiety if you owe money to the IRS or joy if you are getting money back. In either case, your current tax situation can be enhanced if you arm yourself with information, so read on to determine if any of the following tax deductions apply to you.
If you run a home based business with the intent of making a profit, there are over 440 tax deductions available to you that you can itemize on Schedule C of your 1040 tax return. Note that you do not have to actually make a profit, instead, you must have the intent on making a profit and your activity must not simply be a hobby. The following are a few common home-based business expenses that you may be able to itemize to reduce your income and ultimately, to reduce the amount of taxes you owe to the IRS. Please contact your CPA, tax professional, or the IRS to determine if any information herein applies to you.
1. Mileage, gasoline, loan interest, and other automobile expenses: The key here is to track your all of your mileage (so you can differentiate between personal and business use of your automobile) AND keep all of your receipts to determine if you will get the mileage deduction or the expense deduction.
2. Cell phone, monthly cell phone service, internet and modems, and other electronic communication gadgets that are used for business can be itemized on your Schedule C.
3. When you travel for business, you can write off your transportation, lodging, meals, business related training and registration fees, and dry-cleaning expenses. It’s okay to have fun when you travel for business (visit family, amusement parks, etc.), as long as your initial intent is for business.
4. Meals that take place while discussing business including dinner parties that you host: you must document who, what you discussed, when, where (name of the restaurant) and how much you spent. All of this information can be written on the back of your receipt for easy remembrance during tax time.
Managing your tax deductible expenses is hard work, but so is being broke! Choose which work you are going to do, be a good steward over your resources, and get as much money back as you legitimately can during tax season.