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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I recently got a business license to sell vitamins and Health

Resolved Question:

I recently got a business license to sell vitamins and Health and beauty aids from my home
what is the best way to keep track of what is tax deductible and what are considered tax deductible items
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello betsy,

Will you be selling these items over the internet or just to people in your local area?

Do you have a dedicated area in your home that you use as a business office?

Customer: replied 7 years ago.
both
Expert:  Merlo replied 7 years ago.
Hello again betsy,

If you are operating this business on your own as a sole proprietor, you will report the income you have from this business on Schedule C of your tax return. On that same schedule, you may deduct any expenses you had in connection with this business. It is then your net income which is subject to tax.

You may claim a deduction for anything which is considered to be ordinary and necessary in your particular trade. If you have a dedicated area in your home which you use as your business office, then you may claim a deduction for the business use of your home. This is done by claiming a percentage of your home expenses as they relate to the percentage of space you actually use for your business office. Home expenses which can be included would be your mortgage interest, property taxes, property insurance, utility bills, and a depreciation allowance on the home itelf.

In addition to a deduction for your home office, you may also claim expenses for anything else related to this business. This might include such things as the use of your home computer, internet fees, cell phone usage, mileage on your personal vehicle if you drive to pick up or deliver this merchandise, cost of advertising, business cards, and cost of your business license. There may be other expenses which are related to your particular business, but these are some of the more common business expenses which people have as deductions from their business income.

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Thank you betsy.

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