Entrepreneurs should avail this facility if they are operating from the environs of home. These deductions include:
1. Home Office: you can enjoy the deductions if you are operating from the house and the house is used for business purposes.
2. Car: you can get the car as a benefit for your business purpose, including the maintenance and mileage. This works out a lot and can save a lot of money.
3. Personal assets: if you are using your personal assts for business, then you can lay your hands on the tax deductions, like for example computers and furniture.
4. Business Journeys: air tickets, hotels, internal transportation, shipping and even tipping are tax deductible, if used for business purposes. For meals, the government allows deductions up to 50% only.
5. Gifts and Entertainment: now that you are in business, you need to keep your customers and clients happy and what better way than to gift them. But you get a relief up to only 50%.
6. Retirement: The payments you make when saving for your retirement are deductible from your personal income tax. Thus it follows that the dollars you spend for your retirement plan grow tax free in your business until you retire.
7. Family Connections: bringing your children as employees helps you in saving some money as the expenses payable towards them are deductible. Only kids above the age of 8 can be hired.
8. Social Security: As a self-employed worker, you have to pay double the social security contribution. Fortunately, half of this contribution is tax deductible in the 1040 form.
These are only a partial list of what is available to you, for a complete list, log onto the government website and check for yourself.
