Here’s a great article full of good tips. Just a few are…
From Newsday
For the growing number of retirees, consultants, laid-off professionals and those trying to make a dollar out of working from home, here are some tax tips:
Deducting part of your residence. “Even a part of a room devoted exclusively to the business could be acceptable. Don’t deduct the full room,” Gail Marks Jarvis warns in a Chicago Tribune rundown. “Add up the total square feet in your home and figure the percentage that is devoted to your business. Then, deduct a portion of multiple costs - from your rent or mortgage to property taxes and utilities. Use Form 8829 and transfer the information to Schedule C.”
Caution: If you take this deduction, Stephen Fishman, author of “Home Business Tax Deductions: Keep What You Earn,” suggests you arm yourself with photographs for proof.
Work space. You may consider part of your home, workshop, even your boat or garage as “work space.” “But make sure you use the space regularly and exclusively for a trade or business,” Jarvis warns.
Equipment. “If you purchased equipment for your business in 2006, you might be able to deduct the full cost. … You can deduct in a single year up to $108,000 paid for equipment,” Jarvis reports. “Anything from office furniture to computer equipment would count.”
Vehicles bought for mostly business use also come under that $108,000 limit.
Traveling. The easiest way to claim a tax break for business travel is to take the 44.5 cents-a-mile deduction (and be prepared to prove it if challenged). But if you keep really good records of actual spending, you might get a better break - and an accountant could advise if the car qualifies for a depreciation write-off.
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