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Taxing Matters

Come tax time, you'll be glad you decided to start your own homebased business.
November 1, 2003

Q: Are there tax benefits from operating a homebased business?

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A: Without question, operating your own business from home has several tax advantages. You can deduct a percentage of many home-related expenses based on how much of your home you can qualify for a home-office deduction.

For example, if you have a 2,000-square-foot home and a 200-square-foot office, you could deduct 10 percent of many expenses. Here are the most typical deductions:

Taking all the deductions you're eligible for can offset the higher cost of health insurance you have to pay as a self-employed person. For more information, see IRS Publication 587, Business Use of Your Home.

Paul and Sarah Edwards are the co-authors of 15 books, including The Entrepreneurial Parent. Send them your start-up business questions at or in care of Entrepreneur.