![]() ![]() Calculate your home office deduction both ways and find which works better for you. You can then apply that percentage to home-related expenses such as electricity, heating, mortgage payments, and home depreciation. ![]() Calculating your home office using the traditional method involves measuring the office square footage, and dividing it by the total square footage of the home. Again, more than fair for some business owners, but others take the long route and find that it works to their advantage. The IRS allows a simple home office deduction of $5 per square foot. You can calculate “anything that is for the betterment of the vehicle.” Keep in mind that miles driven to and from the office each day do not count as “business.” Take that percentage and apply it to gasoline costs, car washes, new tires, oil changes-even a satellite radio fee or new seat covers. First, divide business-related by your total miles driven for the year. Believe it or not, the “hard way” really isn’t all that hard. Most business owners find the Standard Mileage Rate to be more than fair, but it’s worth calculating vehicle expenses the hard way if you are really looking to save on your tax bill. Sure, $0.57 per mile driven can really add up when you take a road trip across the country to further your business. If you haven’t been saving your receipts this year and think you may have missed deductions in this area, a bank statement will suffice. You can safely deduct 50% of your meals as long as you can show a new client lead or referral came from the meeting. Many don’t keep accurate records and aren’t sure if they can really classify the meetings as “business-related.” However, keep in mind, there is no hard and fast rule about how much of the meeting must be taken up by business talk. ![]() Business owners who have an especially wide network and social schedule often spend thousands of dollars on eating out and entertainment for/with clients throughout the year. Just keeping receipts on a business trip isn’t quite enough.
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