Working from home is no longer a passing trend and has become a real alternative for thousands of Hispanics in the United States. But here’s an advantage that many don’t know about: working from home not only gives you freedom, but also allows you to save a good amount of money in taxes.
According to the U.S. Census Bureau, the number of small businesses run from home has grown exponentially over the past decade, and for good reason. “Home-based business owners can access significant tax deductions that help them reduce their tax burden,” explains Mark Steber, chief tax officer at Jackson Hewitt. If you are part of the Hispanic community and are thinking of taking the leap into entrepreneurship, QueOnnda.com explains how to maximize your savings and avoid common mistakes in the process.
1. Register your business
Before you start deducting taxes, you need to make sure your business is legally registered.
In the U.S., you can operate as a sole proprietor (self-employed) or establish an LLC (Limited Liability Company), an option that can offer you legal protection and tax benefits.
To register, visit the IRS website and obtain an EIN (Employer Identification Number).
This number will allow you to separate your personal and business finances, making it easier to file your taxes.
2. Take advantage of tax deductions
One of the key benefits of working from home is the ability to deduct certain expenses on your tax return. Here are some of the most common deductions:
Home workspace: You can deduct a percentage of your rent or mortgage if you use a dedicated space for your business.
Services and supplies: Internet, electricity, telephone and office supplies can also be deducted.
Personal Vehicle: If you use your car for business activities, you can deduct miles driven and maintenance expenses.
Training and software: Courses, subscriptions and digital tools such as QuickBooks or Zoom also qualify.
The IRS provides details about these deductions on its official website. Remember to document everything with receipts and invoices to avoid problems in case of audit.
Working from home is no longer a passing trend
QueOnnda.com
3. Pay your taxes
If you are self-employed, you do not have an employer who withholds taxes from your wages.
This means that you must pay estimated taxes each quarter to avoid penalties.
The IRS establishes four annual payment dates: April, June, September and January of the following year.
Using tools such as TurboTax or consulting with an accountant can help you calculate the exact amounts and avoid surprises at the end of the year.
4. Open a retirement account
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If you are self-employed, you do not have access to a traditional 401(k) plan, but you can take advantage of options such as a traditional IRA or a SEP IRA.
These plans not only allow you to save for the future, but also offer immediate tax benefits, reducing your taxable income.
According to Fidelity Investments, business owners who save in retirement accounts can reduce their tax bill by thousands of dollars annually.
Consult with a financial advisor to choose the best option according to your income and needs.
Working from home is not only a way to generate income with greater flexibility, but also an excellent strategy to reduce your tax burden.
If you are considering entrepreneurship, make sure you register your business correctly, take advantage of tax deductions, pay taxes on time and plan for your retirement.
