Category: Commercial Real Estate

[ Commercial Real Estate ]

Your Guide to Claiming a Legit Home Office Tax Deduction

I’d bet that on just about every city block or long country road, someone is operating a business from their residence. According to the U.S. Small Business Administration, about 50 percent of businesses are home-based, with a larger percentage (60 percent) working as solopreneurs with no employees.

Having a home-based business is one of the easiest and least risky ways to become an entrepreneur, test your business ideas, and increase your income. No matter if you run a business full-time or as a side gig, claiming the home office deduction can significantly reduce your taxes.

No matter if you run a business full-time or as a side gig, claiming the home office deduction can significantly reduce your taxes.

I received an email from John, who says, “My New Year's resolution is to earn more money working during my off-hours and on weekends. Since the work will likely entail making deliveries for different mobile apps, I’m not sure if it qualifies me for the home office tax deduction. Can you explain more about it?”

Thanks for your great question, John! In this post, I’ll give an overview of the home office deduction. You’ll learn who qualifies, which expenses are deductible, and how to legitimately claim this money-saving tax break no matter what type of business you have.

Who can claim the home office tax deduction

If you work for yourself in any type of trade or business, either full- or part-time, and your primary office location is your home, you have a home business. The designation applies no matter whether you sell goods and services, are a freelancer, consultant, designer, inventor, Uber driver, or dog-walker.

If you work for yourself in any type of trade or business, either full- or part-time, and your primary office location is your home, you have a home business. 

You can have a home-based business even if you’re like John and mostly earn income away from home. This is common for many trades and solopreneurs, such as musicians, sales reps, and those working in the gig economy. If you’re self-employed and do administrative work like scheduling, invoicing, communication, and recordkeeping at home, you have a home business.

Note that employees who work from home can’t claim a home office deduction. W-2 workers used to be allowed to include certain expenses if they itemized deductions. But tax reform took away that benefit starting with the 2018 tax year.

The home office deduction is available for any self-employed person no matter whether you own or rent your home, with the following two requirements:

  1. Your home office space is used regularly and exclusively for business
  2. Your home office is the principal place used for business

You must regularly use part of your home exclusively for conducting business. For example, if you use a guest room in your house or a nook in your studio apartment to run your business, you can take a home office deduction for the space.

You don’t need walls to separate your office, but it should be a distinct area within your home. The only exception to this “exclusive use” rule is when you use part of your home for business storage or as a daycare. In these situations, you can consider the entire space an office for tax purposes.

Additionally, your home must be the primary place you conduct business, even if it’s just the administrative work you do. For example, if you meet with clients or do work for customers away from home, you can still consider the area of your home used exclusively for business as your home office.

Your home doesn’t have to be the only place you work to qualify for the deduction. You might also work at a coffee shop or a co-working space from time to time.

You could also consider a separate structure at your home, such as a garage or studio, your home office if you use it regularly for business. Also, note that your home doesn’t have to be the only place you work to qualify for the deduction. You might also work at a coffee shop or a co-working space from time to time.

RELATED: How to Cut Taxes When You Work From Home

Expenses that are eligible for the home office tax deduction

If you run a business from home, two types of expenses are eligible for the home office deduction: direct expenses and indirect expenses.

Direct expenses are the costs to set up and maintain your office. For instance, if you work in a spare bedroom, you might decide to install carpet and window treatments. These expenses are 100 percent deductible, no matter the size of the office.  

Indirect expenses are costs related to your office that affect your entire home. They’re partially deductible based on the size of your office as a percentage of your home. 

For renters, your rent, renters insurance, and utilities are examples of indirect expenses. You’d have these expenses even if you didn’t have a home office.

For homeowners, you can't deduct the principal portion of your mortgage payment, which is the amount borrowed for the home. Instead, you’re allowed to recover a part of the cost each year through depreciation deductions, using formulas created by the IRS.

Other indirect expenses typically include mortgage interest, property taxes, home insurance, utilities, and maintenance. Allowable indirect expenses actually turn some of your personal expenses into home office business deductions, which is fantastic!

Allowable indirect expenses actually turn some of your personal expenses into home office business deductions, which is fantastic!

However, expenses that are entirely unrelated to your home office, such as remodeling in other parts of your home or gardening, are never deductible. So, your ability to deduct an expense when you’re self-employed depends on whether it benefits just your office (such as carpeting and wall paint) or your entire home (such as power and water).

Also, remember that business expenses unrelated to your home office—such as marketing, equipment, software, office supplies, and business insurance—are fully deductible no matter where you work.

How to claim the home office tax deduction

If you qualify for the home office deduction, there are two ways you can calculate it: the standard method or the simplified method.

The standard method requires you to determine the percentage of your home used for business. You divide the square footage of the area used for business by the square footage of your entire home.

For example, if your home office is 12 feet by 10 feet, that’s 120 square feet. If your entire home is 1,200 square feet, then diving 120 by 1,200 gives you a home office space that’s 10 percent of your home. That means 10 percent of the qualifying expenses of your home can be attributed to business use, and the remaining 90 percent is personal use. If your monthly power bill is $100 and 10 percent of your home qualifies for business use, you can consider $10 of the bill a business expense.

To claim the standard deduction, use Form 8829, Expenses for Business Use of Your Home, to figure out the expenses you can deduct and then file it with Schedule C, Profit or Loss From Business.

The simplified method allows you to claim $5 per square foot of your office area, up to a maximum of 300 square feet. So, that caps your deduction at $1,500 (300 square feet x $5) per year.

The simplified method truly is simple because you don’t have to do any record-keeping, just measure the space and include it on Schedule C. It works best for small home offices, while the standard method is better when your office is larger than 300 square feet. You can choose the method that gives you the biggest tax break for any year.

But no matter which method you choose to calculate a home office tax deduction, you can’t deduct more than your business’ net profit. However, you can carry them forward into future tax years.

As you can see, claiming tax deductions for your home office can be complicated. I recommend that everyone who’s self-employed use a qualified tax accountant to maximize both home office and business tax deductions.

Yes, professional advice costs money. But it’s well worth it, and it usually saves money in the long run when you know how to take advantage of every legit tax deduction.

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By Connie Perez
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[ Commercial Real Estate ]

Easy Ways to Increase Your Earning Potential Today

Are you sick of feeling as though you always have more bills than income? Every month, you work hard to bring home a decent wage to support your family. Yet, somehow, when you need funds, there never seems to be anything available in your bank account. Sometimes, the problem might be that you’re struggling to manage your budget. Not knowing how to properly look after your money could mean that you spend too much, too fast. In other circumstances, your issue might be that you’re not taking advantage of opportunities to increase your earning potential. If you’re already doing everything you can to reduce excess spending and improve your financial habits, but you’re still facing money worries, then the following earning boosters could be just what you need. Let’s look at some quick and easy ways to turn your life around.

Consider a new job

All jobs have their pros and cons to consider. However, some roles definitely pay more than others. If you feel as though you’ve already gotten everything you can out of your current position, and there’s no room left to grow, a new role might be the best option. If you don’t want to switch away from the current company that you’re with, you could ask about switching to a different department. If there’s nowhere else for you to go in your current business, then it might be a good idea to see what someone can offer you elsewhere. Many people who switch jobs can take advantage of looking to improve earning potential than those that stick with the same role. Remember, if you do decide to switch to somewhere new, take your time to find something that actually appeals to you. Don’t just jump at the first offer you get. Play the field first.

Stick with learning about topics that you’re genuinely interested in. This will give you an opportunity to get a job in a space that you enjoy.

Improve your reputation

Reputation can make a big difference in your earning potential these days. In a world where we’re constantly connected to the internet, your image online might help you to find a new or higher-paying job. For instance, if you’re connected to the right people on LinkedIn, then you might speak to someone who can give a good word for you in a higher-paying department in your company. Start by auditing your existing personal brand online. See what people will find if they look for your name. If you have any unprofessional social accounts that are set to public, make them private immediately. Once you’re ready to begin building a name for yourself, look for opportunities to network and show off your skills. This could mean that you join some professional groups, comment on forums, or even visit local events from time to time.

Once you’re ready to begin building a name for yourself, look for opportunities to network and show off your skills.

Develop your skills

Sometimes, jobs will pay you a higher wage for a reason. A career that requires a specialist skill will often pay more than a basic entry-level job. With that in mind, it might be worth building on the talents that you already have. Think about the kind of things that you enjoy doing. Maybe you could work on something like coding or improving your technical expertise. The best way to boost your chances of getting your new skills recognized is to check out some student loans and head back to school. There are tons of different courses that you can take to add new certifications to your resume. You could also look into building out your knowledge about other topics online, taking free courses in your spare time. Stick with learning about topics that you’re genuinely interested in. This will give you an opportunity to get a job in a space that you enjoy.

Ask for a promotion

When’s the last time you just asked your boss whether they could pay you more? If you know that you’ve been delivering excellent work for a good while now, then it might be a good time to ask for a raise. Most business leaders won’t want to take the risk of losing an employee that’s valuable to the team. Check websites that list job openings and find out if there are any higher-paying companies out there that provide a better wage for the role you do now. This will give you a good starting point when you start asking for a wage. If you’re nervous, remember that hiring new team members comes with its own costs. If you’re a great employee, your boss would prefer to keep you around most of the time—even if that means paying more.

If you want to be able to pay your bills each month without worrying about your bank account, it’s worth keeping your mind open to ideas that could increase earning potential.

Start a side hustle

Finally, if you’ve already gone and built some new skills at school, but you haven’t found the perfect job to use them in yet, why not try creating your own career with a side hustle? This is basically a job that you can do on the side to add more income to your bank. Many people have discovered that they can put a few extra hours into their work online each day and make a hefty amount of additional income. Thanks to the gig economy, it’s easy to find opportunities to make cash with things like graphic design, content writing, website development, and more. Start by making a list of the kind of things you’d be interested in doing. You might even decide to create your own business and sell items online using a dropshipping company. Dropshipping services handle things like manufacturing and shipping products for you, so you just need to build a brand and find customers.

Increase your earning potential

Money might not make you happy, but it’s one of the most important things in many of our lives. If you want to be able to pay your bills each month without worrying about your bank account, it’s worth keeping your mind open to ideas that could increase earning potential. Whether you’re developing new cash opportunities with your current employer or thinking about becoming your own boss with a side hustle, make the conscious effort to invest in yourself this year. The quicker you start working on your new earning opportunities, the more money you’ll make for your future.

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By Connie Perez
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[ Commercial Real Estate ]

How to Break Through and Overcome Financial Hardships

Your life and personal finances don’t always go the way you hope. We all have struggles and no one achieves success without their share of hurdles and challenges. However, there are tools that can help you break through financial hardships and live the life you want.

I interviewed AJ Gibson, author of Flipping the Script: Bouncing Back from Life’s Rock Bottom Moments, an Amazon #1 new release. We talk about the personal, professional, and financial challenges that he’s overcome.

AJ is a Los-Angeles based TV host, public speaker, and coach who loves great people, food, fashion, entertainment, and travel. He’s been the host of the nationally syndicated daytime talk show, Hollywood Today Live, a co-host on Access Hollywood Live, and a frequent anchor on Good Day LA. You’ll see him on CBS’s The Talk and even on several episodes of The Wendy Williams Show.

His journey from being a closeted gay boy in Ohio to a host chatting with the some of the world’s most admired celebrities on Hollywood’s biggest red carpets is incredibly inspiring. He has a gift for busting through life’s roadblocks and persevering despite failure.

On the Money Girl podcast, AJ and I chatted about key lessons from his book. You’ll learn how to shift your perspective to find the beauty in life’s most challenging moments. We cover:

  • Overcoming the financial hurdles of becoming self-employed
  • Tips for reaching financial goals when you have big dreams
  • Why fear and shame may be causing you to ignore your financial situation
  • Leaning on professionals to help stay on top of your financial life
  • Tools for turning hopelessness into a positive, fresh outlook on your future
  • Using a focus wheel for daily motivation to achieve your dreams and goals

Listen to the interview using the audio player above, or check it out on Apple Podcasts, SoundCloud, Stitcher, and Spotify

ABOUT THE AUTHOR

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a trusted and frequent source for the national media. Her book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show. Stay in the personal finance loop! Listen and subscribe to the Money Girl podcast on Apple, Spotify, or wherever you get your podcasts.

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By Connie Perez
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[ Commercial Real Estate ]

Does Your Small Business Need a Blog? Blog Writing Services Can Help

If you have a business, the next step to taking it further is to build and grow a connection with your customers. Simply providing a service or product is no longer enough. In a world that is always moving and full of change, people crave meaningful interactions. And that need extends to the products and services they use. Customers want to be surrounded by things they can identify with. If a business with great products or services is also able to provide some kind of added value for someone, that person is more likely to become a loyal patron. 

As a business owner, providing that added value can feel like a huge task. This is where the value of blog writing services can really shine. Not only can these services create more connections between you and your customers, but they can also make your life easier through a smoother workflow. Here are some questions you can ask yourself to get started.

What are my goals?

Ultimately, you probably hope to increase your sales. However, modern consumers expect personal connections. Set a goal for providing helpful facts that engage new readers. Establish a goal regarding how many new readers left comments on your blog. Consumers are more likely to complete sales when they feel that you hope to improve their lives. 

Do I even need a blog?

Yes. According to studies conducted by the Pew Research Center, people regularly turn to blogs and internet articles instead of using their televisions for news and information.

How can I connect with customers?

A blog allows businesses to connect with customers in many ways. Blogs provide answers to consumers' questions. They make your brand seem approachable and friendly. Blogs encourage readers to interact with your company and maintain meaningful connections. In addition to providing a blog, reach out through social media to invite readers to visit your website. 

Who are my current customers?

If you aren't sure about the needs, motivations, and concerns of your existing customers, it will be easy to miss out on meaningful connections. As you respond to comments on your blog posts or on your social media sites, you'll learn more about the needs that drive sales. While copywriters will spend time researching your current customers, it's also helpful for you to develop relationships with them.

Who is the target audience?

Who benefits most from the goods or services you offer? These people are your target audience. Take a look at the demographics of your existing customers to identify the new audience you want to attract. Remember to focus on how your offerings can improve the lives of your existing customers to understand how to attract people from your target audience. 

How busy is my schedule?

Building and maintaining a blog with a consistent schedule takes a lot of work. Some people make the mistake of underestimating the time commitment that goes into planning, design, and content creation. When your workday is already pushing beyond the 9-to-5 schedule, you don't really have time to produce consistent, fresh content. 

There are a lot of potentially great blogs out there that consist of just one or two posts … last updated eight months ago. If you want to have a blog that builds and sustains an audience, a consistent schedule is critical. Without a schedule, it can sometimes be impossible to ensure posts are written and content keeps flowing. If you have loyal followers and you disappear for several months, you may very well be forgotten! Using blog writing services makes this a non-issue. When someone else writes your content, you can tend to your life and work without having to worry about losing customers.

Can copywriters really represent my voice?

The task of finding someone to accurately portray your company should not be taken lightly. After all, writing in a business or brand's voice is a critical part of the copywriting process.

It is equally important to understand the value of professional copywriters. There are many factors involved in the process of creating great copy that leads to increased sales, and copywriters must understand and use these strategies. With research into your subject and your target consumers, talented copywriters can represent your voice. 

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By Connie Perez
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[ Commercial Real Estate ]

How to Measure Progress and Achieve Goals

Measurement! I just love measurement. That’s because it tells you how you’re doing and how much progress you’ve made. Progress checks can motivate you, help you catch yourself when you’re slacking, and tell you when to change course. 

Without giving thought to how you define progress, however, you can measure the wrong thing, or measure the wrong way. You might end up demoralized for no reason, or falling behind unknowingly on a project, or missing opportunities. So if you’re going to measure progress, do it right! Turn off auto-pilot “gut checks” and measure progress thoughtfully.

Measure process goals

If you’re Type A like me, you probably overwork yourself, under the assumption that more work gives more progress. But does it? Have you ever measured? Just being busy and stressed doesn’t mean we’re getting anything done. We need to track how far we are from our goal, and whether we’re closing that gap.

First determine the kind of goals you’re chasing. Episode 462, “Grow a Pair for Your Career,” outlines the difference between outcome goals and process goals. Outcome goals—like getting a promotion—are something you strive for, not something you just do. Process goals, on the other hand, are measurable actions that help you get closer to your outcome goal, like making ten more sales calls each day. 

If you’re going to measure progress, do it right! Turn off auto-pilot “gut checks” and measure progress thoughtfully.

On a daily basis, measure progress through movement toward your process goals. It doesn’t matter how much you work, only whether that work takes you closer to finishing that day’s process goals. Then check that your process goals are doing what they should, by tracking overall movement toward an outcome goal.

For example, if you work in sales, your process goal might be to make fifty cold calls a day. If that’s your goal, sending two hundred emails should not count as progress. What’s more, if your outcome goal is to close sales, and you haven’t closed one in months, you may need to rethink if you have the right process goals. Maybe “number of calls” doesn’t lead to sales. Maybe you need to make progress on the quality of your calls, instead. So make your new process goal tweaking your sales pitch, and direct some work toward that.

Measure how far you’ve come

Another way to track progress is to look at how far you are from your starting point. 

Sam is a twenty-something who’s just started up a fairly successful online delivery company. The vision of being the next Amazon.com seems impossible! Or at least, light years away. And it is. But knowing that it’s not Amazon yet isn’t a useful measure for evaluating progress. Furthermore, it’s so far away that it isn’t even clear which paths lead to that result.

Sam can instead concentrate on what’s been accomplished so far. They started sitting around a dining room table. Now they have office space, customers, a business model that works, money in the bank, and profit. By measuring progress based on how far they’ve come, not on how far they have left to go, Sam can realize they’ve made tons of progress, and can make sure it continues to unfold, as more and more milestones get added to the list.

Measure distance to your goals

At some point your goal is within reach. Then, you can start measuring how far you are from your goal, and concentrate on closing the gap.

Don’t do this too soon! You can hurt morale. At my last Harvard Business School reunion, for example, doing an “Am I there yet?” progress check gave me a soul-crushing burst of inadequacy as I was moderating a panel of my classmates, whose combined net worth was enough to purchase a third world country and pave it over. In gold. 

When you’re out on a long run, you get a surge of fresh energy when you see you’re only ten feet from the finish line, and there’s an entire 55-gallon drum of gummy bears waiting at the end. And an Oreo ice cream cake. The next thing you know, you’re barreling over the finish line.

When you’ve passed the halfway point, start measuring your progress by how quickly you’re closing on your goal. Keep that Oreo ice cream cake in mind, and set new goals to push you those last few feet.

Even if you get some steps wrong, just making the plan will energize you and be motivating.

A good way to do this is to make a checklist of things you’ll need to do to reach the end point. These can be high-level things like, “Run A/B testing with focus groups,” or low-level things like, “Write an email to call for A/B testing participants.” Once your plan is on paper, finishing your project will seem much more doable, since all the steps left to take are right there in front of you. And as I talked about in episode 466, "Make a Plan for Motivation," even if you get some steps wrong, just making the plan will energize you and be motivating.

Re-measure often

Once you figure out the best way to track your progress, and the types of progress you need to track, choose how often you’ll track. Sometimes, tracking progress once a week is plenty. But from my experience, it’s best to track progress every two to three days.

That way, if you suddenly notice you’re not where you should be, you only have to make up two or three days’ worth of work. If you were only checking once a week, you could get an entire week behind before you’d notice it.

From my experience, it’s best to track progress every two to three days.

What gets measured gets managed. And we love to manage progress. On a daily basis, concentrate your measurements on your progress goals, rather than your outcome goals. Then choose a less-frequent measurement that is based on where you are in your project: distance to your goal, or distance from your starting point. With a little experimentation, you can find the magic balance that keeps you on top of your game.

This is Stever Robbins. I give great keynote speeches on productivity, Living an Extraordinary Life, and entrepreneurship. If you want to know more, visit http://SteverRobbins.com.

Work Less, Do More, and have a Great Life!

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By Connie Perez
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[ Commercial Real Estate ]

16 Good Jobs for Teens (Plus Business Ideas!)

If you’re a teen looking for a job (or a parent helping your teen find a job), you’re in luck! Most people know that 16-year-olds can work in a variety of stores and restaurants. However, some companies will hire teens as young as 15, and sometimes even as young as 14. We’ll share where you should look if you’re a teen looking for ways to earn your own cash.

Here are some of the more well-known jobs that employers hire 14 and 15-year-olds for.

Jobs for 15-year-olds

There are a few companies willing to hire teens as young as 14 or 15. We’ll focus on a few industries that hire 15-year-olds first.

Restaurant Worker

Fast food and casual restaurants often hire teens as young as 15. For instance, Boston Market is a casual restaurant chain with over 450 locations in the United States. Some of the job positions they might hire 15-year-olds for include busboy/busgirl jobs and cleaning crew.

Grocery Store Worker

Some grocery stores will hire 15-year-olds to work as a cashier or stock person. Hy-Vee is a national grocery store chain with nearly 250 locations in states such as Iowa, Minnesota, and Illinois.

Note that not all Hy-Vee stores hire 15-year-olds. Check with your local Hy-Vee location and talk with the manager there.

Movie Theater Worker

As a movie theater worker, you might sell tickets, take tickets, work in concessions or do theater cleanup. The AMC movie theater company has locations throughout the U.S and often hire teens as young as 15. As with Hy-Vee, locations are independently managed and many locations will hire 15-year-olds, however not all locations do.

Amusement Park Worker

Six Flags amusement parks and other amusement parks commonly hire teens as young as 15. There are a variety of job positions available such as park cleaner, store cashier, food service jobs and ride operators.

Check with your local Six Flags or other amusement parks to see what types of job positions are available for 15-year-olds.

Lifeguard

The American Red Cross lets teens as young as 15 get certified for service as a lifeguard. If you’re interested in this type of job, talk with hiring managers at local pools and beaches.

If they’re willing to hire a certified lifeguard at 15, get your certification through your local Red Cross or online.

Jobs for 14-year-olds

Some industries, although not many, hire 14-year-olds. There are a variety of restaurants and stores that hire 14-year-olds. Some of the jobs you might do in a restaurant at 14 include cleaning, cashiering, and food preparation.

The following restaurants often hire teens as young as 14. Note that the hiring age can vary by location.

  • Baskin Robbins
  • Ben and Jerry’s
  • Bruster’s Real Ice Cream
  • Chick-Fil-A
  • Culver’s
  • Dairy Queen
  • McDonald’s
  • Rita’s Italian Ice

Grocery stores also hire teens as young as 14 at times. Again, each location may vary on the hiring age based on management preference and state laws. But the following grocery stores have been known to hire 14-year-olds.

  • Giant Eagle
  • Giant Food
  • Kroger
  • Publix
  • Winn Dixie

If you want even more ideas for jobs for teens check out this list.

Not interested in working for a company? Try this next idea on for size.

Businesses you can start as a teenager

What if you want a job as a teenager but you want something different? How about starting your own business?

One of the keys to operating a successful business is to “underpromise and overdeliver.” In other words, do a better job than what you agreed to do and make the customer extra happy they hired you.

Here are some business ideas that anyone age 14 or up can start.

Tutoring

Are you smart in school subjects such as English, reading, math or science? How about working as a tutor for other students your age or younger?

Advertise your skills to parents of other children in your area, or on social media outlets. Set a rate of pay; most tutors charge by the half-hour or by the hour.

Continue reading at WalletHacks.com.

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By Connie Perez
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