This guest post is brought to you by Outright.com, the easiest way for clever crafters to track every ounce of income and every penny in expenses, run their businesses more simply, and enjoy a less taxing tax time!
Every frugal crafter knows penny pinching is an essential art form of the business. Without it you end up more stressed than need be, as the expenses and bills can pile up with a quickness!
One means of penny pinching is to find all the tax deductions you can. These can help when you fill out your quarterly estimated taxes as well as the “big dance” in April. During your next tax day make sure to include the following deductions to squeeze those pennies even harder.
You’ve gotta spend money to make money, and crafters have to buy stuff to make stuff! Luckily for you, the stuff you buy is tax deductible. After all, you wouldn’t have a business if you didn’t have product, right?
If you’re not saving all your receipts from your purchases, start doing so immediately. Save them in a folder somewhere so you can take deduct every purchase. Every button and scrap of fabric counts!
Although crafters have adopted the Internet as a home for their businesses, there is still some travel involved. Whether it’s across town to mail a package or across state to go to a craft fair, you’re putting miles on your car – and gas isn’t cheap! Speaking of that cross-state trip, your hotel room is tax deductible and so is your transportation while on a business trip.
3. Home Office Expenses
Sure, a lot of crafters don’t physically go to an office. Maybe you just step into the guest room to do all your work or head down to the basement so you can be alone and get work done. Well guess what? That may qualify that room for an office!
As long as you solely use that room as an office it counts in the eyes of the IRS. Now you can deduct a portion of bills like electricity, gas, and even mortgage/rent off your taxes.
Even the simplest crafting job still takes some sort of tool or equipment. It may not take a crane, but needles and a hot glue gun still count as equipment, which means they are deductible for your taxes! Also, upgrades and fixes to your equipment enjoy a certain amount of deduction as well.
5. A Few Others
Do you have any “business aids” like software to help you design your product? Or software that keeps track of your business financials, like Outright? How about magazine subscriptions to keep you current in the world of crafting? Anything that helps you run your business more efficiently counts as a business expense and is therefore a deduction. Just remember to always save your receipts!
This post was brought to you by Outright.com, the simplest way to manage your business finances online!