Tax Attorney For Your Home Based Business?

Whether you operate a traditional business or a home-based business, tax filing at the end of the financial year is mandatory. You should understand that the method of filing tax for a home-based business is much different to a traditional business. In fact, the return you file is usually based on your business type. There is one major difference between filing tax for your home-based business and a traditional business. This difference lies in the method of calculating the space allocated for your business. This calculation is very important so that you can deduct the costs of using the space from your business tax return. This article provides information on why you need to use a tax attorney in Columbus Ohio for your home-based business.

The first important thing to understand is what's deductible for your home office. If you need to qualify your home office as a legitimate business expense, it should be exclusively used for business activities. For example, if you operate the home office from your kitchen and the kitchen table also serves as your work desk, you won't be able to deduct it from your yearly tax returns. That is why you need to maintain a dedicated space in your home for your business activities. It can be a dedicated room or even a portion of a room. That way you will be able to deduct some of your housing costs from your yearly tax returns. In the past, a home-based business had to calculate a percentage for deduction purposes. But the method was simplified in 2014. Today, a home-based business can claim $5 per square foot of the office - up to 300 square feet. For example, if a web designer uses 200 square feet of his/her 2,000 square feet home as the office room, he/she can deduct $1,000 from the year-end tax returns. Any upgrades such as painting, and decorations could be deducted as well. In fact, the IRS is more likely to audit home-based businesses that take advantage of home office deductions. Hence, it is best that you work with a tax attorney when filing year-end tax returns for your home-based business.

There are many factors to consider when filing year-end taxes for your home-based business. A layman may find it quite confusing and overwhelming at times. Even the slightest mistake can result in hefty penalties over time. All your tax filings should be 100% error-free - no matter if you are filing it for the first-time or the tenth time. If you are filing taxes for the first-time, the chances of making a mistake are higher compared to an experienced tax filer. That is why you should consider working with a qualified tax attorney in order to avoid hefty penalties in the process. Just imagine how much of money you may waste if you have to pay for simple mistakes on your tax return. There are many other important factors to consider when filing taxes for your home-based business.

When you are calculating home office deductions, you can also deduct a percentage of your utility bills such as your monthly heating and electricity bills. Since you are deducting a percentage of your square footage for the home office, you can also deduct a percentage of the electricity, broadband, heating & cooling, and any other utility bills. Also, don't forget to factor in the paper, paper clips, ink toner, and other supplies that you purchase for your business. All these supplies are fully deductible - provided that you use them for your business. Unfortunately, a small business is more likely to be audited by the IRS compared to a big corporation. When you are audited by the IRS, you should be able to prove that you have done nothing illegal. If not, you may have to pay hefty penalties to the IRS, and it can have a negative effect on your home-based business. That is where the services of a professional tax lawyer come in handy. These professionals are skilled and experienced in interpreting the tax laws in favor of their clients. Your small business will benefit by working with such a professional when you are filing taxes for the first time. That is why you should hire a highly qualified and experienced tax attorney in the area. There are hundreds of tax lawyers operating on the market. But all of these professionals are not created equal. Your homework is essential when selecting the best tax attorney for your home-based business. It will save you so much of time and money in the tax filing process.

A home-based business owner should complete Form 8829 - which helps get a tax deduction for the business use of your home. In fact, you may need to collect necessary paperwork for the calculations. Before you gather the required paperwork, you should be sure that the area of your home meets the strict IRS use test. The specific area should be the principal place of business in your home. In fact, such a space should be used regularly and exclusively for business purposes. If you don't use this space on a regular basis or you use it for any other purpose other than business - it won't meet the regulations of the IRS. If the space is used even once or twice a year for any other purpose other than business - it won't qualify for tax deductions. The process is a little bit complicated, especially for the first-time tax return filer. That is where the services of a professional tax lawyer come in handy. A good tax attorney can help you clear all doubts and work within the rules of the IRS. You won't be making big mistakes when you are aided by a professional tax attorney when filing your year-end taxes. It will help save you a lot of time and money in the long run.