Many people have skills that allow them to work from their home, car or just wander around from client to client. If you're the go-to fix-it person in your area or even fix things across the Internet, becoming a legitimate tax entity can be a bit confusing. Doing it the easy way with basic tax services can keep you legal, but you might be leaving a lot of money on the table. As you prepare for your computer repair tax situation, consider a few ways to fix your deductions and credits.
A Home Office Deduction May Be For You
If you're fixing computers by yourself as a way to earn money, odds are you aren't working out of a brick and mortar office. Many self-employed technicians are in such situations either due to an aversion to working for others, a lack of tech jobs in the area or the high expenses when it comes to buying a storefront building for their services.
Especially in low income areas without much competition, working out of your home may be an excellent way to keep income far higher than costs. A home office deduction can give you a break on taxes by giving you a potentially lower tax rate than a fully established business with multiple employees.
Examine your home and the way that you work. Do you use part of your home to save information? Is your main computer used for downloading anti-virus programs, looking up repair information or ordering parts in an area that can be considered its own office area? If you think not, there are ways to bring yourself up to compliance in case of audits and simply to keep things honest.
Dedicating An Area To Your Business For Tax Purposes
Dedicate a spare bedroom or commonly unused area for business only. This room will become your home office, and its dimensions (length by width) can be used for tax purposes to determine the size of your working area.
Don't worry if you don't have a completely separate area for working. If you can remove most personal items from the corner of a room or even split a bedroom in half for the sake of business, you should be able to claim that area for tax purposes.
Such divisions aren't just helpful for tax purposes. Having a business area makes it easier to organize your tools, keep track of client information and work with minimal distraction. If you bring computers home for repairs, having a specific area for stacking and connecting broken units without moving your personal items around can make repairs much faster.
Contact a tax preparation expert, such as Balkcom Pearsall & Parrish CPA's PA, for detailed assistance with computer repair and home office tax policy.
Do you want to become an entrepreneur in 2017? If you desperately desire to start a first business this year, you likely need to raise some funds. To help you accomplish this feat, think about scheduling a meeting with an experienced financial advisor. This individual can provide you with a wealth of fundraising ideas. For instance, you might want to take out a small business loan. You may also wish to sell shares of your company to the general public. On this blog, I hope you will discover ingenious, effective tips to help you finance your first business venture. Enjoy!