If you are a home business owner in the United States who has made a substantial amount of income this year, you are probably anticipating a huge tax bill when filing your 2011 income tax return.

I have listed six tax strategies and deductions that may help you to reduce the amount of money you owe to Uncle Sam with the filing of your 2011 income tax return.

Please note that I am not here to give you tax advise. Before you take any action on any tax strategy or deduction, I highly recommend that you consult with your CPA/Tax Accountant and or Financial Adviser to determine if any of those strategies are right for you.

1. State Estimated Tax Payments-If you pay estimated tax payments to the state, you might want to pay them in December 2011 instead of January 2012 so that you can take the state tax deduction on Schedule A in 2011 instead of 2012. Check with your tax accountant before doing this since you might be subject to the Alternative Minimum Tax meaning you won’t receive any benefits for additional state tax deductions.

2. Contribute Money to a Retirement Account-If you have the money available, you might want to contribute the maximum amount to a Tax Deductible Retirement account. These accounts could include Simple IRA, SEP-IRA (Simplified Employee Pension), Solo 401 (k), traditional IRA, etc.

SEP IRAs are great for self employed home business owners. With a SEP IRA you can deduct up to lessor of 25% of your income or $49,000 for the 2011 Tax Year. Money can be contributed for the 2011 tax year up to April 17, 2012. Your Tax Adviser will determine your maximum allowed SEP IRA contribution when you have your income tax return prepared.

3. Purchase Office Equipment and Furniture-If you are planning to purchase new furniture and equipment such as a new desk, office chair or computer, you might want to do it in December instead of January so that you can write them off in 2011.

4. Home Office Deduction-If you work out of your home you can deduct a portion of your home that you use exclusively for business. Keep in mind that this office space must be used exclusively for business and you can only benefit from it as a sole proprietor if your business has income.

5. Charitable Contributions-Not only did you get involved in a home business to improve the lives of you and your family, but you also got involved to improve the lives of others. This is why it is a great idea to give back to those who are less fortunate by donating money to a charity of your choice before December 31, 2011. If you have old clothes, furniture etc around the house, it is best to donate them to goodwill or the salvation army before the end of the year as well.

6. Travel Expenses-If you did a lot of traveling relating to business this year, you can deduct all expenses related to business travel including Air Fare, Hotel and meals. An Example of business travel could include going to a two day internet marketing seminar in Orlando Florida. However, you Cannot Deduct the airfare of other family members who go there for pleasure nor the tickets to the Walt Disney World Theme parks for example.

There many other ways to save money on your income taxes for the 2011 tax year. Your CPA/tax accountant will let you know of any other deductions you may benefit from as well.

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