Do you know what deductions you are eligible to claim as a home based business owner? Are you getting the maximum tax return due to you?

You may be able to legally maximise your return simply by expanding your knowledge of what you are eligible to claim.

Running a business from home can yield many rewards. Home-based business owners can enjoy not just financial rewards but also positive shifts in their work-life balance and improved motivation through being their own boss and working everyday on something that they are passionate about. Read more...  

Sole Proprietors are entitled to deduct all fees paid to independent contractors as a legitimate business expense. This expense is found on Line 11 of Schedule C and is described there as "Contract Labor." The purpose of this article is to help you better understand this expense and how to deduct it without worry.

Let's start with a definition of this expense. The term "contract labor" is somewhat confusing because when we use the word "labor" we often think of employee compensation such as wages and salaries. Well, Line 11 of Schedule C is definitely NOT referring to employee compensation. Rather it is referring to non-employee compensation to people such as independent contractors, consultants, and the like. These are other businesses that are providing a service to your business. These other businesses could be self-employed Sole Proprietors or other business entities such as a Corporation, Partnership or a Limited Liability Company (LLC).

In light of the above, a more succinct definition of contract labor is this: expenses paid for services rendered by non-employees. Read more...  

If you are a Sole Proprietor with employees, there are numerous employee benefits that you can deduct on Schedule C. Are you aware of what those are? If not, read on and get the scoop on this type of deductible small business expense.

First, let's discuss what should not be deducted on Line 14. Note that the Schedule C description for Line 14 reads as follows: "Employee benefit programs (other than line 19)." So we go to Line 19 and read "Pension and profit-sharing plans." In other words, do not include pension plan expenses or other employer-provided retirement plan expenses on Line 14.

Now on to the good news: what kinds of expenses can you deduct on Line 14? Here's an overview of the most common types of employee benefit plans: Read more...