What tax deductions can a person take Direct Sales? home business |

    Overheads

  1. Inventory related expenses such as cost of goods sold (CGS), the part of your house used to store inventory and the rent paid for a place to do business are tax deductible. Insurance and utilities such as electricity, gas, oil and water are also tax deductible. A home office deduction can be taken to the business use of your home, but this deduction is subject to the exclusive use for business.

    2. Travel Cost

  2. A standard mileage rate of 50 cents per mile (from 2010) or actual vehicle expenses (gas, oil, maintenance, repairs, vehicle taxes, licenses, depreciation) expenses are tax deductible. Travel expenses (lodging, tolls, incidentals, tolls, parking fees, air fares, bus fares, taxi, limousine) for travel to trade shows, training, delivery and shipments may be deducted as well.

    3. Fees and Supplies

  3. Fees paid for training, start-up kits, advertising, accounting, professional journals, legal advice, permits, professional licenses and bank expenses are tax deductible. Delivery costs, transportation costs, shipping supplies (boxes, tape, packaging, labels, stamps) and office supplies needed to run the company are also tax deductible.

    4. Equipment and Taxess

  4. Excise taxes, property taxes, property taxes, local taxes and state, Social Security and Medicare taxes paid on wages of employees are tax deductible expenses. Finally, depreciation of office equipment and furniture are tax deductible.

    5. Considerations

  5. Only part of the business from home can be deducted. Utilities must be in proportion to the size of the house used for business.

Starting a small business from home

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