Money Saving Tips for Working from Home

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FINANCIAL PLANNING

Money Saving Tips for Working from Home

January 28, 2016 | Jennifer Goodwyn

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Working from home, or telecommuting is a growing trend in the business world. For individuals, it is seen as a chance to spend more time with loved ones without having to relocate or commute. For businesses, an increase in productivity levels and talent combined with a decrease in overhead costs associated with leasing a particular office location makes the work-from-home model increasingly attractive. While working from home continues to grow in popularity for many reasons, the most important for individuals and businesses alike is that it can help save money.

Technology Helps Bring Down Costs

As the proliferation of the high-speed internet, smartphones, and tablets continues, companies and individuals are finding it easier to stay connected without having to meet face-to-face. Every year it gets more convenient and less expensive to video conference, share documents, and collaborate in real time. As these technological advances continue to increase productivity and save money, more businesses are going to take advantage of them. Improve your productivity and save money by staying up to date with technological advances as they occur.

Services Designed to Save You Money

There are services available intended to help you save money while working from home. Services like Servcorp's virtual office package or local IT help desk support packages are designed specifically to assist people who work from home while helping them save money. Whether you are an independent contractor or work for a business with a decentralized structure, using a virtual office for important things like a professional address, phone number, meeting space, and a dedicated receptionist will help you or your business maintain a professional appearance while cutting costs. Additionally, being aware of local IT support services can help save time and money when problems inevitably occur.

Claim Your Home Office on Your Taxes

Another significant advantage of working from home is the opportunity to save money on your taxes every year. Although an estimated 26 million Americans have home offices, only about 3 million claim home-office deductions on their taxes. Whether it is because people are unsure about their eligibility or want to avoid the risk of an audit is unclear. In any case, knowing the tax rules and taking advantage of them can help you or your business save a lot of money.

If you work from home on a consistent basis and utilize a particular space exclusively for work-related tasks, you should file Form 8829, Expenses for Business Use of Your Home. It is important to note that you will not qualify for this if your company provides you with an office. If you are eligible, you should be able to write off 100 percent of work-related costs, including office supplies and technology. Additionally, you can deduct indirect business expenses such as your mortgage or rent, insurance, and utility bills based on the size of your home office. For example, if the size of your home office is 10 percent of the size of your home, you should be able to claim 10 percent of these indirect expenses on your taxes. If that sounds too complicated, there is another option called the “safe harbor” rule. A few years ago, the IRS tried to simplify the way deductions are calculated. Under the “safe harbor” rule, you just multiply the square footage of the area of your home used for your home office at the prescribed rate, which is $5 per square foot, up to $1500. Regardless of the method, claiming your home office on your taxes can save you a lot of money every year.

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Money Saving Tips for Working from Home