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Discussion Starter #1
I'm a graphic/web designer by trade.. i get asked to do enough side work around here that I started to wonder if i should officially launch a home-based business to do freelance work from.

I don't really /need/ to be official about it, but i'm wondering if i'm losing out on the tax benefits of not claiming a home-based business.

All i hear around tax time is how people with a home business claim everything but the kitchen sink .. so i'm thinking.. should i make my freelance work official?

Are there pros and cons to something like this?
 

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No real cons, just benefits. You get to claim all kinds of deductions on your home which outweigh any additional tax paid on your extra income. Run down to City Hall and get yourself a business license! I guess you're already there, aren't you?

Also, it might be worthwhile getting an accountant to walk you through all the deductions available to you.
 

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Discussion Starter #4
Dogs, in the states, can become deductions as they are part of the security for the business premises...
I always told tuck he needed to get a part-time job to pay for those vet bills.
 

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Brendan does.

I'm not exactly sure of all the tax breaks he gets. I do know he claims his car, gas, and any repairs he has done on it. He claims a certain amount of square feet of our house, because it is his office.. I'll have to ask him when he gets home what some of the other things he claims are.
 

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We can deduct everything, including the kitchen sink, because of Paul's self-employment. :) Computer, office supplies, advertising, the cost of his license, cell phone - etc., etc.!!!
 

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We claim pretty much all the stuff that has already been listed, although there are pretty specific rules regarding to what extent any of it is really business related and can be claimed. If you are going to go this direction, be sure to have a CPA do your taxes.

The only downside I see would be if fees ended up being more than what you will save. If it's going to be close then I would say that it's not worthwhile. It can be a lot more paperwork and you have to figure in the pain in the ass factor.
 

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I have a home-based business. I wasn't sure what all to deduct when I started 7 years ago but just kept all receipts and entered them into Quickbooks Simple Start, which you can download free from Intuit. Then, come tax time, I use Turbo Tax for Home and Business and it walks you through everything and asks all kinds of questions to make sure you aren't missing out on anything.

Buy a mileage book at the office supply store and write down your miles. Then, you can either deduct mileage expense OR your vehicle expenses, whichever is greater. Turbo Tax will figure that out for you :)

I got my house painted on the outside and was able to claim a portion of that on my taxes due to having a home office.
 
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