There are many expenses associated with running any business and a home based personal business is no different. Many of these expenses are deductible and you want to know what those are so when you are building massive wealth and enjoying time freedom, you don’t want the IRS to crush you at tax time.

There are the obvious startup cost and membership fees associated with your home business, but some other deductible expenses may be, office supplies, internet subscriptions, phone expenses, postal expenses, travel expenses to name a few. You may even take a deduction for using a spare bed room as an office in your home. Make sure you talk to an accountant about all the deductions that you should be aware of to maximize your tax deductions.

There are many systems to track your expenses available to us and you want to look into what works best for you, but one that I use is simple. I purchased an accordion file when I started my business that has a pocket for each month. Every receipt that I acquire in transacted my business goes into that file in the appropriate month. At the end of each month, I take out the receipts and categorize them by expense type and enter them into a simple spread sheet. You can use a computer of just create a simple notebook by month listing your income and expenses for your business. For example, all my office supply receipts would go into one pile and I would tally up the months total and put it into my expense column under office supply expense. Simple right?

Then you would do the same for each category and tally the total for all your monthly expenses. This is also a great tool for tracking where your money is going and planning out your budget each month.

This simple technique will make tax time a breeze for you and/or your accountant. At tax time, just pull up your spreadsheet or your notebook and all the information that you will need is right there for the year.

Again, make sure you talk to your CPA about all the deductions that you qualify for and take advantage. This will make your home business experience a even more pleasurable one. God Bless,