Do you work in a home-based business? Consider taking the home office deductionIf you own a home-based business, educate yourself on the home office deduction. It could save you a lot in taxes. First figure out what percentage of your home is used for business purposes. You can deduct the corresponding portion of utilites, home insurance, real estate taxes, and even office improvements or repairs.
This deduction is especially appealing for new businesses as many are bootstrapping to cut expenses. The caveat is if you take this deduction for three consecutive years or more before selling your home, you won't be exempt from all of the capital gains on the sale. You have to pay taxes on the gain, expressed as a portion you deducted for your home office.
Here's an article on Bankrate.com about the
home office deduction.
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