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Reduce These Hidden Costs
By Suzanne Martin
Many of the costs of running a home business often go unnoticed. Think of items such as insurance, taxes and office supplies. But finding ways to cut these and other costs can improve your profits. Here are four areas that deserve a close look when it’s time to trim expenses.
1. Home Office Deduction
If you qualify for the home office deduction, taking it could save you a bundle. The deduction allows you to write off a percentage of your home expenses, such as:
- Mortgage interest
- Utilities
- Property taxes
- Insurance
- Maintenance and repairs
The deduction not only reduces the amount of federal income tax you owe, but also reduces the amount of self-employment tax you owe, says NASE National Tax advisor Keith Hall, a certified public accountant.
To qualify for the deduction, you must use your home office space exclusively and regularly for business. If you meet the requirements, don’t be afraid to take the deduction, Hall says.
“The fear that taking the home office deduction will trigger an IRS audit is unwarranted,” says Hall. “In my opinion, there are no IRS red flags surrounding this deduction. And your tax savings can be significant.”
2. Office Expenses
Reduce, reuse, recycle. And you’ll save money. Print on both sides of your paper. Use refillable ink cartridges. Or recycle them for money back at office supply stores. When possible, download bank or credit card statements instead of printing them.
Turn off your office electronics at night to save electricity. Monitors, printers, computers and scanners all drain energy—even when they’re in stand-by mode.
3. Business Insurance
During tight times you might be tempted to scale back your insurance coverage. Don’t.
You need protection for your home business. To reduce insurance costs, shop around for the best deal.
4. Marketing
With the growth of social networking websites, review websites and other online tools, many home businesses no longer need to drop big bucks on expensive marketing brochures or mailings.
Instead of spending money, spend time communicating with clients and prospects online. It’s an easy way to cut costs without cutting your marketing message.
Freelance writer and editor Suzanne Martin works from a home office. She sometimes forgets to turn off her electronic gadgets at night.