![]() ![]() The cost of renting or leasing business space can take a considerable chunk of your expenses, and a break is always welcome. If your home office doubles as a guest room for your visitors, you may lose out on the tax write-off. However, the IRS allows you to enjoy this tax deduction if you use your home office exclusively for business regularly. Under this arrangement, small business owners can deduct up to $5 for every square foot of their home office with a limit of 300 square feet. Using your home as an office space may qualify as a deductible expense on your taxable income. ![]() If you are one of those people, there is good news for you. ![]() You may want to reach out to your financial advisor to see if you’re eligible for this tax write-off.Īs the business changes, many people find it feasible to turn a spare room into your house or apartment into an office. However, this benefit is limited to business owners making anything below $157,500 for single filers or $315,000 for partnerships. This means if your small business generates a profit of $100,000 in a year, you can deduct $20,000 before calculating the applicable tax. Under the 2018 tax reform law, small business owners can deduct 20% of the year’s income before applying the ordinary income tax rate. Qualified business income for Tax Write-Offs. ![]() However, it is important to work with skilled financial advisers such as to help you understand the business expenses that qualify for tax write-offs and help you save money. Maximizing your deductibles can translate into considerable savings every tax season when all deductibles are considered. If an expense qualifies as deductible per the IRS criteria, the expense is deducted from your taxable income before computing your taxes. What is a tax write-off?Ī tax write-off, otherwise referred to as a tax deduction, is an expense deducted from your taxable income. Luckily the government offers a helping hand to small businesses in the form of tax write-offs or tax reductions. The problem with shelling out money is that it is one of the most significant challenges facing small business owners. It involves shelling loads of money to the taxman. The tax season can be very stressful for small business owners. ![]()
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