Hey, everybody. Happy Hump Day Hustle. I hope everybody’s having a pretty killer week, and those of you who are not, I’m going to pray on you that it picks up and gets a lot better for you guys. This is Danny with DannyandLeta.com with the Hump Day Hustle. Please say hello down below and ask any questions that you might have.
I’ve got something really killer to touch on today, and it has to do with those of us that have a little home-based business that’s probably the biggest benefit to that. What that is, is the tax benefits of having a home-based business. I’m not going to give any advice. I’m far from an expert.
All I’m going to do is plant a little seed with you guys and touch on a little bit of the benefits that we and a lot of other home business owners that we know are able to – a lot of those benefits that we’re able to reap. Then give you some insight on how to take that and run with it and learn the benefits of how to incorporate that in your business.
The whole deal is, as you know, if you’re not in a home-based business now, you know you’re spending money. You’re spending money on some kind of office expenses. You’re buying stuff. You’ve got apps; you’ve got programs on your computer; you got your computer. There are tons of different little things that we spend money on for our business, and we’re able to recoup that back.
Whereas, if we’ve got a regular job, and we start our home business, a lot of times we don’t understand that with that money that we’re taking from our actual job to put in to get our home business going, a lot of us, in the beginning, don’t realize we can get that back and decrease our tax burden for that year.
To be even more specific, let’s say today we decide we’re going to go into business for ourself, and we’re going to start a little home business, whatever that is. If you want more information on that, reach out and messenger to us, so we can guide you there. Today, we decided to go into home business.
What I’m going to touch on are the first few things you want to do before you start going crazy, spending money, and building things, and getting things in operation, and all this jazz. One of those things – the most important thing is, get you a name. Go get a DBA if you can, but the biggest deal is, get a separate bank account.
And if you’ve got a savings account, you’re going to want to take a little bit of that out, put it over in that separate account, and then that way, anything you’ve got to spend money on, at tax time, your tax guys are going to get on your nerves, and you’re not going to get on their nerves trying to figure out, “Where did I spend money on out of my regular operating account,” and all this jazz.
So, you’re going to have that separate account. This makes it the easiest way possible at the end of the year to establish what was spent on company stuff, on your home business stuff, and what was not because all you’ve got to do is turn in that – you’ve got that ledger from the whole year showing exactly what you spent money on. Of course, keep your receipts and all that jazz.
I’m going to touch on a few little things that – I was looking at Hawthorne Law online. I have not affiliation with them. I was just doing some research, and they’re one of the sources that I found online for some top benefits of keeping track of your taxes as a home-based business. I touched on one of them.
These are some top tax deductions that we won’t normally be able to take advantage of if we don’t have the financial knowledge to do so.
- Office expenses: printer, computers, cellphone, cellphone service – this calculator, right here, and anything in this home office that I had to spend money on, I get to deduct on taxes at the end of the year.
- Cellphone and service, I touched on. Your tax guy will get more specific on that. You can’t do all of it if you only have one, but I’ll leave that to them.
- Travel: This is cool. Back when I was doing real estate investment, and I would travel to different states or anywhere in the city, I keep an app called Mile IQ. It is killer; it is awesome. Get it; you won’t regret it. You’ll figure it out. It’s bad to the bone. My airfare, my hotel stays, anywhere I was. If I was doing a deal out of town, all of that expense, I can deduct all that.
- Meals: This is huge. If you’ve got a home business, you deduct your meals if you’re talking business. If you and your spouse go out and you’re going to launch a new ads campaign or whatever it is you’re doing for your business, and you want to go out and go to Tommy Bahamas and chill out and talk about, “This is what we’re doing.” You can deduct that. You don’t want to take advantage of it, obviously, but the IRS allows that.
- 20% of self-employment deductions: I’m going to let your tax guy answer that one. I’m not even going to try to go there, but it’s pretty killer.
- Mileage: Check this out. Last year, I think mileage was like 58.5 cents a mile that we can deduct for business. This year, I think it went down to like 57.5 or maybe 57 cents or something like that.
Just think about this. Last year, if you had a home business, but you didn’t understand the benefits of deducting this, that, and the other, and let’s say you did 10,000 miles going out, and having meetings, and visiting people, and talking business and this, that, and the other. If you would have deducted the mileage, you would have been able to keep about 5-grand of that – 5,800 of that. So, 10,000 miles, you’re able to keep 5,800 of that because it’s deducted, it goes toward your mileage deduction for taxes.
Your tax guy will go into that, too, and make you see the light on that stuff. That one’s huge. Huge.
- Retirement: On retirement accounts, I think there’s more leniency and privilege there when we have a home business on how much we can put toward those. Ask about that, as well.
- Health savings accounts: Awesome. That’s not something we’ve ever been in the habit of utilizing, but I think we’re going to look at that for sure.
- Home mortgage and taxes, or if you lease, I think you can write off some of that too. So, right here, this is our home business. This is our office, so we legitimately only do business work out of this section of the house. This is the home business office here. Anything that has to do with this, there’s a percentage, a ratio that you’ll figure out with your tax guy how much of your mortgage you’re able to write off because of that, or your lease, or whatnot.
The bottom line is guys if you’re starting or you have a small business, and tax benefits and deductions are not at the top of your list, please do yourself a favor and call your tax guy, whoever you go to. I don’t care if it’s H&R Block. I don’t care who it is. Tell them what you’re doing and check this out. I believe you can still go back three years and revise your returns.
So if you started, say, two years ago with your home business, and you kept decent records, you can go back and revise those returns and try to find some benefit from there. You may not want to mess with it. You might just want to start now, fresh, and then move forward. So, go talk to your tax guy.
I’m going to include a video down below. Watch it. It’s awesome. It will shed some more light on things. It’s from a bonafidetax guy. His name is Sandy. Trust me. You’re going to thank me for this later. Do it. It’s the best thing you can do for your home business is see what tax benefits come from doing that.
I’m signing off. Once again, sorry, I ran late. God bless y’all. Again, leave some comments below. Let me know you’re here. Say hello, and we look forward to catching you on the next Hump Day Hustle. Reach out and love someone. God bless, and we will talk to y’all soon.
Oh! You know what? I’ve got a freebie, too, I want to give you. Respond either instant message me, or respond below. I’ve got a killer deal I want to give you just for showing up and saying hi. Okay. God bless, take care. Bye now.