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Are you afraid to take advantage of the home office deduction? Perhaps you are the victim of one or more of these common tax myths. Unfortunately, many self-employed folks shy away from taking the home office deductions for at least one of the following four reasons. 1. Fear of an IRS audit. There’s been a rumor going around for years that the home office deduction increases the likelihood of an audit. I would love to know who started that rumor so I could give him a piece of my mind. For now, I’ll just be thankful that you are reading this article so I can tell you: don’t believe it! There is no basis for it. Treat the home office deduction like any other legitimate business expense: if you are entitled to take, by all means, take it. 2. Frustration over the record keeping requirements. Obviously, there are some numbers that must be compiled to take the home office deduction. For homeowners, they include the following: mortgage interest, real estate taxes, homeowner’s insurance, utilities (gas, electricity, water, trash removal, etc.) and repairs. The first two are usually reported to you on your lender’s annual Form 1098 statement. The utilities are easy to calculate by simply adding together your twelve monthly bills for each service provider; if you don’t have those bills, the amounts are just a phone call away to your friendly utility company. And home repairs are easily found by looking through your checkbook register and/or monthly credit card statements. For renters, there’s usually fewer numbers to crunch: the rent amount is the main figure, and I’m sure you know that without even looking it up. You also need any renter’s insurance or utilities you paid. 3.The belief that it’s not worth it. When you consider that there is likely hundreds or even thousands of dollars in tax savings at stake, don’t you think this is time well spent? If it takes you an hour to put this information together, and you save $500, where else can you make that much money in that amount of time? Sure, I know how much some people despise paperwork and number crunching. Maybe you prefer not to touch a calculator with a 10-foot pole. If that’s the case, hire an accountant to do your return and the extra tax savings from this deduction alone will likely more than cover the tax preparation fee. 4. A misunderstanding of the tax benefits. Have you ever heard a person say that he’s not taking the home office deduction because he’s already deducting mortgage interest and property taxes on Schedule A? Well, the next time you see your friend, dazzle him with this tax strategy wisdom: If you take the home office deduction, you not only reduce your income tax, but you are also reducing your self-employment (SE) tax. This is because the home office deduction reduces your Schedule C profit. For every $1,000 of home office expense, you are losing about $150 in SE tax savings.

Working at home as become a popular option for millions of people around the world in recent years. With the advent of the internet, many people were able to get out of their regular office and moved their workspace to a home office where they easily connect to their data at their workplace or many people are self employed and work from home as well. In any case home offices have become one of the most important rooms in a house and need to be designed with care and thought.

Of course we all want a home office to be visually appealing and inspiring to work in as well as being functional so that productivity is not forgotten. It doesn’t matter if you’re a designer or an accountant, designing the perfect workspace is important for your allowing you to work efficiently and effectively, but also for keeping your mood positive. If you’re successful or wish to be successful, you need to have the home office that reflects that success.

Part of the design of a home office is choosing the right furnishings to adorn the office and provide a functional and appealing workspace. Choosing the right desk that will give you plenty of work space and a chair that will provide comfortable seating for many hours is key. These two items just may be the most important elements in the room.

Creating a peaceful and productive work environment also requires that you try to minimize noise in your workspace. If working from a home with small children, this can certainly cause a distraction, so choose the location of your office with care. It’s likely best to choose a room far from your rec room, children’s play room and their bedrooms if possible to minimize the noise and the distraction for children playing. A quiet workspace is important for both concentration and also to present a professional place to work. If you spend a great deal of time on the telephone, a quiet space is an absolute must.

Often overlooked in the design of a home office is the use of nature in the room to add to the ambiance and peaceful feel of the room. You may be working from this room 8 or more hours per day and adding elements like plants and small trees can certainly change the mood of a room and give it a little life. Plants need light to survive and so do humans, so adding plants and making sure a window is present will make a home office a much more hospitable place.

Due to the time spent in a home office, for health reasons choosing ergonomically correct furniture should not be overlooked. While an ergonomic chair and desk may not be the least expensive options, they will help to minimize illness and injury from things like carpel tunnel syndrome, sore neck and back and will help increase productivity.

Creating a functional and visually appealing office does not have to be expensive. With a few simple pieces and some creative flare, you can easily create a workspace that allow your to complete your work from the comfort of your own home.

The whole world is facing an economic downturn at the moment, your job is not as secure as before. Many people start up their business recently not only because their jobs are not secured, but also their desire for the freedom of managing their time. Starting up the business at home is great because you can save money on your electricity and fuel cost, and you can even spend more time with your children. But have you ever wondered why although so many people tried to start up home business but not everyone succeeds?

The main reason is that everyone feels more comfortable working at home sweet home, but usually too comfortable means lower productivity. How could you set up a perfect home office which allows you to be comfortable as well as productive? Here are some ideas:

1. The Environment

Find a place in your home with good ventilation and lighting, without any of these you will always be very sleepy once you start working. There should also be enough space for your office tables, cabinet, computers and other essentials. A room with windows would be good but make sure you are not facing it, a window behind you or to the side is better since the outside world will not distract you.

2. The Connection

It is the most important issue to stay connected with outside world while you work at home. Stable electricity and internet connection are very crucial. Also make sure you have a constant connection to your phone and fax machine.

3. The Furniture

Think carefully what you need for your home business. Do you need printer stands? Do you need computer desks? Do you need cabinets and how many do you need? Check the measurements and plan carefully the layout of your room before actually purchasing any furniture. It is not a good thing to have all the furniture at your office first before you found out there is not enough space!

4. The Equipments

List out all the equipments you need and think about which one you will use most and which one least. Place the most frequently used equipment next to your seat. For example, if you need to use your computer most often, you should put it on your desk; other equipments like file cabinets for old files, you can put it far away from your seat because you are not going to use it that often.

5. Be Organized

Make sure you keep your stuff organized and never take your documents out of the office because you will never find them once it is lost outside the office, it might be in your kitchen, your bathroom or your daughter’s toys box! A tidy environment makes you more concentrate and sometimes you will have customers visiting your office, it is a lot better if they see a nice tidy office.

6. The Tax

Any costs incurred to add equipments and any other service to your office (i.e. not the whole area of your home) such as heating and air conditioning tube are tax deductible. Make sure you record all the related expenses.

Keep these 6 essentials on your head when planning your home business. Good luck!