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100+ Work-from-home tax deductions you need to know

The world is changing, and so is how and where we work.

With more and more of us shifting to working from home, it’s important to know the financial benefits that come along with it.

Many business owners are surprised to learn that taxes are one of their biggest costs as an entrepreneur. Soul crushing, right? That’s why it’s so important to be aware of as many deductions and credits as possible to keep more of your money in your pocket!

Check out this list of 105 possible tax deductions and credits for business owners who work from home. 

  1. Accounting fees 
  2. Advertising and marketing 
  3. Auto expenses 


AUTO EXPENSES DEEP DIVE 

Driving to and from client meetings, conferences, and vendor locations are all considered business mileage. Commuting to and from your office or co-working space is NOT considered mileage. To deduct your auto expenses, the first thing you have to do is track your mileage. You are required to have a log of all business mileage throughout the year, as well as the total personal miles driven. 


ACTUAL EXPENSE METHOD 

The deduction is based on the portion of mileage used for business. You take your business use percentage (business miles divided by total miles) and multiply that by your total vehicle expenses for the year, and then that’s your deduction. 


SIMPLIFIED METHOD 

Not interested in keeping track of every time you get gas?  No worries. With the standard mileage deduction, you simply take the standard mileage rate and multiple it by your total business miles driven for the year.

**List continued**

  1. Adobe Creative Suite
  2. Advertising 
  3. Banking fees 
  4. Blue light filter glasses
  5. Building repairs and maintenance 
  6. Business association membership dues 
  7. Business cards
  8. Business trips 
  9. Charitable deductions made for a business purpose 
  10. Child Tax Credit 
  11. City Taxes
  12. Cleaning/janitorial services 
  13. Cameras 
  14. Collection expenses 
  15. Commissions to affiliates 
  16. Computer and tech supplies
  17. Computer insurance 
  18. Consulting fees 
  19. Continuing education for yourself to maintain licensing and improve skills 
  20. Conventions and trade shows 
  21. Cost of goods sold 
  22. Coworking memberships 
  23. Credit card merchant service feeds
  24. Depreciation 
  25. Desk
  26. Display Ads
  27. Drones 
  28. Earned Income Tax Credit 
  29. Education and training for employees 
  30. Equipment 
  31. Exhibits for publicity 
  32. Facebook Ads
  33. Franchise fees 
  34. Freight and shipping costs 
  35. Furniture and fixtures (limits apply)
  36. Google Ads
  37. Gifts for customers (limits apply) 
  38. Health insurance premiums 
  39. Equipment repairs 
  40. Hard drives & digital storage
  41. Headphones
  42. Health savings account
  43. Home office 


HOME OFFICE DEEP DIVE 

If you use a portion of your home exclusively and on a regular basis for business use, then you are allowed to deduct a portion of your home expenses, including:

  • Real estate taxes
  • Mortgage interest 
  • Rent
  • Utilities 
  • Insurance 
  • Repairs & Maintenance


REGULAR METHOD


To use this method, you take your home office square footage and divide it by your total home square footage. You then multiply that percentage times your total home expenses to find your deduction.

Ex: Molly has a home office that is 100 square feet that she exclusively uses for her marketing business. She rents her home, which is 1,200 square feet. Her total annual rent, renters insurance, and utilities cost $15,000. Her business use percentage is 8.3% (100 divided by 1,200), so her home office deduction is $1,250 ($15,000 times 8.3%).

SIMPLIFIED METHOD

Not really up to keeping track of all of your home expenses throughout the year? Problem solved. Just multiply your home office square footage by the set rate of $5 to find your deduction. The maximum deduction allowed is based on 300 square feet.

Ex: If Molly used the simplified method, she would take her office square footage (100) and multiple it by $5, so her deduction would be $500.


**List continued**

  1. Office chair
  2. Instagram Ads
  3. Interest paid 
  4. Internet (portion used for business)
  5. Investment advice and fees 
  6. IRA contributions (limits apply) 
  7. Legal fees 
  8. Leased vehicle or equipment 
  9. Liability Insurance
  10. License fees 
  11. LinkedIn Subscription
  12. Losses due to theft 
  13. Marketing
  14. Materials 
  15. Maintenance and repairs 
  16. Meals 


MEALS DEEP DIVE 

You can deduct 50% of your meals as long as you meet these requirements:

  • Meet with a business contact 
  • Discuss business
  • Pay for your and their meal (it cannot be lavish or extravagant)


EXCEPTIONS

  • When traveling for business, ALL of your meals (even meals by yourself) are deductible. 
  • Your meals with employees are only deductible if it is used to improve productivity. 
  • If you offer an open house or office party, your meals are 100% deductible.

But just remember, while meals are deductible, entertainment expenses are NOT. These entertainment expenses include country club membership fees, golf tee fees, yoga classes, sporting events, etc.

Ex: Kiara takes a client to a baseball game where she buys hot dogs and beers for herself and her client. The cost of the game is not deductible. However, she can deduct 50% of the cost of the food and drinks as long as they were purchased separately from the tickets.

**List continued**

  1. Microphones
  2. Monitors
  3. Mortgage interest on business property 
  4. Moving expenses 
  5. Newspapers and magazines 
  6. Office supplies and expenses 
  7. Payroll taxes for employees (including Social Security, Medicare, and unemployment taxes) 
  8. Parking and tolls 
  9. Pension plans 
  10. Phone (cell or home) (portion used for business)
  11. Phone service
  12. Phone applications
  13. Postage 
  14. Print Ads
  15. Printer & paper
  16. Prizes for contests 
  17. Professional Coaching
  18. Project Management Software
  19. Rebates on sales 
  20. Research and development 
  21. Retirement plans 
  22. Royalties 
  23. Safe-deposit box 
  24. Sales Tax
  25. Scanner
  26. Security programs
  27. Social media advertising 
  28. Software and online services 
  29. Storage Equipment
  30. Storage rental 
  31. Subcontractors 
  32. Telephone (business use portion)
  33. Transportation
  34. Video equipment 
  35.       Virtual workshops & seminars
  36. YouTube channel 
  37. Wages and salaries paid to employees 
  38. Wethos back office services
  39. Website design 
  40. Website hosting services
  41. Wifi mobile hotspot 
  42. Workers’ compensation insurance
  43. Zoom and other telecommunication software 


It’s important to note that while this list is just a start when it comes to the potential tax deductions and credits available to freelancers and small business owners, not every one of these items is always an applicable deduction depending on your situation.

Want to know which of these 109 items are applicable for you? Schedule a free consultation with me to review your business expenses and see where you can save. For more financial tips & tricks, check out my website at www.newwayaccounting.com

Candace Galiffa
Candace Galiffa

Candace Galiffa is the founder of NewWay Accounting. She and her team understand the challenges that small businesses and entrepreneurs face. She comes from a family of small business owners and has witnessed firsthand what is needed to build a successful company. NewWay Accounting team’s goal is to make their accounting and taxes as straight-forward and simple as possible.