Writing Off Home Office Improvements: What You Can and Can't Do as a Small Business Owner

If you're working from home and are a small business owner in Springfield, you might be happy to know that the IRS allows you to write off a variety of expenses, including improvements to your home office. Below, Bells Marketing Consultant shares how to write these improvements off and tips for making sure these write-offs are handled correctly.

Home Office Expenses You Can Write Off Before getting into the IRS's home office allowances, it's important to point out that your home office must be relegated for regular and exclusive business use and must be the principal place of business. Here are a few deductions your business might be able to write off: •Fees: Any fees or expenses associated with setting up your entity. •Construction costs: Remodelling any part of your home to create a suitable office. •Purchase and installation of a new outbuilding: Adding a new structure to your property for business use. •New office furniture: When necessary for the operation of your business, furniture may be deductible. •IT equipment and installation: Computers, printers, and other tech equipment may be tax-deductible when used for business purposes only. •Moving to a new apartment: If you plan to rent a larger apartment in Springfield to accommodate your business office needs, this can also be written off, provided your office is specific to business use.

Tracking Your Business Expenses When you're investing money into your business to improve your office space, there's often an opportunity to write off the loss. Tracking these expenses and obtaining proof is vital when claiming them on your tax return. Using reliable accounting software is a good way to keep track so that you know where you stand when tax season comes along. These programs typically have tax forms and tax guidance included. If you're looking for a good program to track your home office improvements, try one of the following software packages: •QuickBooks Pro •Simple Accounting •FreshBooks Avoiding Audits Some small business write-offs or actions trigger red flags with the IRS. Try to avoid these whenever possible and if you can't, consult a tax professional. •Excessive deductions: Writing off all of your meals, gas and other small business expenses can be the fastest way to trigger an audit. Only write-off necessary business expenses. •Large charitable donations: Donating large amounts of cash to charity can look suspicious, as some businesses make donations to avoid paying taxes. •100% business use vehicle claims: Claiming to use 100% of a vehicle for your small, home-based business can be seen as unreasonable, and as such, the IRS is likely to audit if you make this claim. •High-volume cash transactions: Conducting business in all cash or even mostly cash can be seen as suspicious by the IRS.

Make Taxes Easier With Business Formation Forming a business entity is a good way to make tax season a bit simpler. Depending on the needs of your company, forming a limited liability company (LLC) or a corporation can offer a variety of benefits. Familiarize yourself with Missouri’s business formation laws to ensure you're selecting the right entity. When you're ready, rely on a formation service to help you quickly and affordably complete your formation.

Minimize Tax Exposure — Maximize Deductions Working from your Springfield-based home office isn't just convenient, it's also a great way to access the benefits of running a small, home-based business, including tax write-offs for home office improvements. For help in other areas of your business, such as marketing, connect with Bells Marketing Consultant, the #1 digital marketing consultant in Springfield Missouri!

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