One of the questions I get asked a lot by new business owners is how much in tax they should plan for. The answer is always “It depends.” That’s because everyone’s business and financial situation is different.
The same is true with a home-based business. How much in taxes will you save? It depends. In a second, I’ll give you some examples of tax savings, but first I want to emphasize that you must have a business. The IRS is death on this issue. You can’t simply buy a business opportunity and then not run it like a business. You must meet the IRS criteria for having a business. We talk about that on this blog and on USTaxAid.com.
Here, as promised, are some average deductions your home-based business may get:
**Based on average expenses, 30% blended tax rate
How much will you save? It all depends on your circumstances. One thing is for sure, though, you’ll save a lot more with a home-based business then you will without one.