Often working out of their home are the self-employed individuals. If this is the same situation as yours, then below is a primer on home office tax expenses you can claim on your taxes.

Home Office Tax Expenses

A country that is built on small businesses is America. The guts of our economy are the little guys pursuing the American Dream from the extra bedroom even though the big companies are the darlings of the media. Fortunately, the tax code contains deductions tailored to help cut your tax bill.

When claiming home office tax expenses, it is important to keep a receipt for each and every amount you are claiming. When dealing with the IRS, receipts are your ammo. Keep them at all costs.

Often when maintaining a home office, taxpayers would wonder how they differentiate a business expense from a simple home expense. Here, the key is the square footage. What you need to do is simply divide the square footage of your office by the total square footage of the home. Typically, this number is represented by a percentage such as 20 percent. In other words, 20 percent of the square footage of the house is represented by the home office. Once you have the above answer, you can multiply it by the total yearly amounts paid for rent or mortgage interest, insurance, maintenance, utilities, taxes, depreciation of the home and repairs. When it comes to each of these home office tax expenses figures, they can be deducted.

In addition to the above, you can also deduct expenses completely related to the business. For instance, the purchase of a desk for the office is entirely attributable to the office and can be deducted in full.

Heed These Words of Caution

Keep in mind that home office tax expenses actually have some limitations. If you are reimbursed by an employer for various home office expenses, you cannot also claim those expenses as a tax deduction. In other words, no double dipping.

For some time now, there has also been an urban myth that the Internal Revenue Service keeps a close eye on home-based businesses. While this may have been true ten years ago, today that is not clearly the case. To this end, the IRS has actually come out and issued clear statements to the contrary. Fear of an audit is not a reason why you should fail to claim home office tax expenses. It is simply not a rational fear!

When you are running a small business, this can be both stressful and incredibly gratifying. Making sure that you claim home office tax expenses to help your cash flow is very important.

Before starting any new business, whether it is new or taking over an existing one, it is of paramount importance that you seek the advice of a professional accountant.

What they can offer

In addition to preparing your accounts, a good accountant should be able to advise you on most aspects of your fledgling business, notably:-

* whether to set up the business as a sole trader, partnership or limited company

* help on VAT registration and preparation for any necessary returns

* advise on suitable methods on how to best set up all areas of your bookkeeping and records

* help with raising finance and preparing business plans

* offer input into preparation of the cash-flow predictions for your new business

* advise on setting the necessary profit margins to ensure profitability of the business

* identify any legislation that is applicable to your business

* provide a full payroll service if required for all members of your staff

* tax advice on all general matters

* audit service if needed

* verifying accounts of another existing business that you are considering purchasing

A Accountants in Cambridge checklist to help you with your selection of accountant

Before making your choice these are some important points to consider:

1. Verify their qualifications. You want to ensure they are a member of one of the three main professional bodies, which are:

* the Association of Chartered Certified Accountants (ACCA)

* the Chartered Institute of Management Accountants (CIMA)

* the Institute of Chartered Accountants in England & Wales (ICAEW)

2. Start with personal recommendations, maybe from friends or family with an existing business.

3. Preferably hold meetings with two or three different accountants before making your decision

4. In most cases the first meeting should incur no charges but check beforehand

5. Ask if you can seek references from some of their existing customers

6. It will obviously make your meetings more convenient if your accountant conducts his business locally

7. It would be preferable if they were used to dealing with companies of a size similar to that of your own

8. Do they have a good understanding of the business sector you are entering?

9. How many partners are involved in the practice and who would be handling your business affairs? Arrange to meet this individual to ensure you feel comfortable with them

10. An accountant who is used to dealing with businesses that are similar in both size and complexity of your own business would be an ideal appointment

11. How good are they of keeping clients informed and up to date? Do they issue reminders to their clients regarding any forthcoming returns that may be due?

12. Determine what their fees are and how they levy their charges. A large number of accountants do charge by the hour, however because initially you are a small business, most should be willing to agree a fixed annual fee with you

13. If you maintain good accounting records, perhaps on Excel files for example, then that in turn will make it easier for your accountant to process them. Thereby this should help keep their fees down

14. Whilst they are already looking after your business affairs, it would make sense to ask your accountant what their charges would be for dealing with your personal tax matters as well

Letter of Engagement

Once you have chosen your accountant then they should prepare the terms of the relationship in a ‘Letter of Engagement’. This will be issued to you and contains the terms of the relationship between you and your accountant.

Like any good relationship, open and regular communication with each other is essential. Diligent accountants should be notifying you well in advance when returns of some type are due - whether it be quarterly VAT returns or end of the financial year.

Similarly, it is incumbent upon you to keep good records, update your accountant with any changes to your business and make sure you have all the relevant information readily available for them when needed.

Occasionally, review your relationship with your accountant to check you feel you are still receiving good value for your fees. Are they still responsive to your business needs? Has your business outgrown them or vice versa?

By following the above Accountants in Cambridge guidelines I sincerely hope you will be delighted with your new accountant. However, if that is not the case, then I would recommend going through the same selection criteria as before. With the appointment of a good accountant, it provides you with the reassurance that your tax affairs are in professional hands.

As each financial year draws to a close, everybody is preparing to head off to their Sydney accounting services to get their tax done. For many people, getting their tax affairs in order is a frustrating task, especially if you have not kept your records in good order.

You are required to keep your important financial records for five years. To do your taxes properly any Sydney accounting service you use will require you to provide these records.

The guide below will help you choose what financial information should be kept for tax filing purposes:

* Documented income - includes everything you have earned during that year. It should be all-inclusive with payments from employers, income from your business or hobbies and any other payments (income) you received. You will need to provide records of all income.

* Car expenses - If you use your vehicle for business travel you should have a lot of mileage and expenses for petrol and repairs to provide to your accountant

* Do you travel for business? If so, keep all receipts for expenditures during business related trips.

* Clothing - if you must wear work specific clothing, such as safety glasses or steel capped boots, you may be able to claim the cost of these. You may also claim the cost of laundering your clothes.

* Bank fees - any fees paid on business or investment related accounts should be recorded.

* Education - any work-related study that you have done may be able to be claimed as well, so keep receipts of any courses or books you have purchased.

* Home office expenses - Your claim for the costs incurred in running your home office may be larger than you realize as you can include portions of utility bills and internet costs.

* Insurance payments - Business owners pay to insure their equipment. You may also have purchased insurance to cover liability or other risks and may be able to claim the costs paid throughout the year.

Sydney accounting services will ask you to provide the information and proof they need in order to complete your tax in a way that will provide maximum benefit for you. Help your accountant by submitting organized and complete records for him to use.

Also, many Sydney accounting services offer specialised advice in different areas, so you may want to consider this when choosing a Sydney accountant to go with.