About 80% of Americans have expressed a desire to make an income while at home. Cash flow problems cause around 82% of all businesses to fail, which can cause creditors to issue a bank levy to settle any debts if you fall behind. Having a home office can help you cut costs and increase the success of your business. Here are seven ways that a home office can help you save money.
Transportation ExpensesOne of the biggest ways you can save money is on the cost of gas and other related auto expenses. For example, if you commute an average 30 miles each way, you can save up to $3 a gallon which can add up to $700 or more each year. You’ll also reduce wear and tear by working from home, which can be used to pay off debts. If you are married and one of you stays home to work, you could sell the second car, eliminate a car payment, and pay far less in insurance. This can also save you hundreds of dollars each year on oil changes, repairs, parking, insurance, and other maintenance costs.
Food And Beverage CostsStaying home to work eliminates the need to find somewhere quick on lunch break to eat. Plus, you can also cut down costs by not having to grab that expensive name brand coffee on the way to work. You can make a perfectly brewed coffee at home as well as healthier meals your waistline will thank you for. Having food available that’s easy to grab while you are working can also save you money on food delivery costs because you were too tired to make dinner after a long day at the job. You can easily save $100 or more a week by buying groceries to prepare meals at home.
Professional AttireWhen you work exclusively from home, you can typically wear whatever you want unless you have to go meet clients or have video meetings. This can save you quite a bit of money on buying clothes, accessories, and shoes. You can also cut down on laundry and dry cleaning expenses. The amount you will save depends on what your clothing budget is typically on a regular basis, but you can see significant savings.
Child Care CostsMany parents can save money on child care costs by working from home. Child care is often one of the biggest expenses that working parents face. This can save you around $200 a week or more. The flexibility of having a home office means you can set your own hours and make even more money to pay off creditors. You can work while your child is sleeping or have a family member or friend watch your child as the need arises.
Household ExpensesOperating a home business can save you money on many household expenses. You can have more time to negotiate contracts with cable and internet companies. It also gives you extra time to do household chores like cleaning, renovation projects, and yard work that you may have hired someone else to do while working outside the home. The extra time you save not having to get ready and then drive all the way to work could be used to find even more ways to earn extra cash or take classes to boost your skills.
Home Office Tax DeductionsOf the approximately 155 million individual tax returns that the IRS processed in 2018, a percentage of them were home business owners that saved money from being able to work from home. Operating a business from home can save you money by claiming tax deductions on many of your expenses. If you have a home office, you may be able to deduct portions of your mortgage, home maintenance costs, repairs, utilities, and property taxes. You may also be able to claim deductions from expenses on weather-related damages like flooding as a result of the more than 2.4 trillion gallons of water a hurricane typically dumps.
It doesn’t matter if you're a homeowner or renter in order to claim deductions, but you must use your home office exclusively for business and nothing else. The easiest way to determine the amount of your home office deduction is to multiply the square footage of your home office by a certain rate, which is generally $5 a square foot. Individual workstations on average shrunk in size from 80 square feet in 1992 to 39 square feet currently. So for example. a home office that is 39 square feet multiplied by $5 would give you a $195 tax deduction. You can also determine your tax deduction by measuring your actual business expenses from your total residential expenses.
There are many ways you can save money by working at home. Working from gives you the freedom to cut costs as well as earn even more money than what you could make working for someone else. Having a home office provides convenience and flexibility in order for you to create a better work-life balance while providing that extra padding to your wallet.