Home Business Tax Deduction Checklist

Kelly Ann Butterbaugh

If you're running a personal business, whether you're selling products for another company in home parties, you sell homemade products on-line, or you're a freelance writer or photographer like me, you need to keep close fiscal records for each year's income tax. Keep track of both your earnings and your deductions, and save a receipt for everything.

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Is it deductible?

Look at the checklist below to begin to brainstorm your upcoming deductions for this tax year. For each question that you answer "yes" you may have a tax deduction. (Always check with an accountant to be sure your deduction is eligible for your business.)

Mileage

  • Do you drive to your customers' homes to make sales, close deals, or show products?
  • Do you collect money from customers, drive to the bank to deposit it into a bank account set up for your business, and then deduct money from that account to order the products for your customers? (Direct sales reps do this often.)
  • Do you drive to the store to buy supplies for your business?
  • Do you drive to business meetings or conferences?
  • Do you drive to locations to do research for your business?
  • Do you drive to office supply stores to make copies?

Supplies

  • Do you purchase items from your host company which you show to your customers as samples?
  • Do you purchase basic office supplies?
  • Do you have a computer that you use exclusively for your business?
  • Do you purchase publications aimed at your business or that enhance your business? Do they provide information you use in your business?
  • Do you send catalogs and flyers to your customers?
  • Do you read books that are in the subject of your business?
  • Do you display products from your business in your home?
  • Do you purchase display products in your business?

Services

  • Do you take customers to lunch or dinner?
  • Do you pay web fees for your business web page?
  • Do you have a separate phone line used exclusively for your business?
  • Do you pay dues for a professional organization?
  • Do you ever travel to conventions, meetings, or events that charge admission?
  • Do you ever pay for a hotel while at these events?
  • Do you hire someone to help with an aspect of your business?
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  • Do you pay notary fees?
  • Do you incur postage costs in your business?

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