Get The Most Out Of Home Tax Advantage

Being a homeowner means you are entitled to a number of tax breaks.
Article By Gerri Willis, CNN

One of the most important tax advantages of home ownership is the deduction of your mortgage interest. But there are also plenty of tax benefits for people who just bought a home. For example, you should be able to deduct points, or costs, that your lender charged you when you took out your mortgage. One point equals 1 percent of the loan amount borrowed.

Top Five Tax Breaks For At-Home Entrepreneurs

Forbes.com:

By the Census Bureau's last count in 2002, half of all businesses in the U.S. are home-based. The U.S. government encourages this kind of entrepreneurship. Dig deep and at-home entrepreneurs will find a few precious tax deductions, say Mark Birge and Steve Mentzer, accountants with Aldrich, Kilbride and Tatone, an Oregon-based accountancy firm.

Alterations to the tax code in 1999 made it easier to qualify for home-office tax deductions. For instance, engineering and construction types who spend lots of time in the field, but do most of their administrative work at home, can still qualify for certain deductions.

1. Infrastructure (utilities, phone service, housekeeping services, landscaping) Run-of-the-mill homeowners and renters can’t deduct these expenses, but at-home entrepreneurs can.

2. Home mortgage interest and property taxes. U.S. taxpayers can deduct these anyway, but as a small business owner, you can save even more by applying a percentage of mortgage interest and property taxes to the home-office section of your tax form.

3. Travel expenses. You can’t deduct fuel expenses if you commute to work each day, but if you work from home, you can deduct the costs of traveling away from your home for any business-related activity.

4. One-time office equipment purchases. Section 179 of the tax code says you can take a one-time deduction–up to $105,000–for the purchase of office equipment, as long as you don’t purchase more than $400,000 of equipment in a calendar year.

5. Family affair. Sole proprietors with children under 18 who work for them can deduct their children’s “wages.”