Tax Considerations List of Categories

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I have a homeowner's policy. Will this protect my business?
How can I document my home office?
Can you suggest alternatives to meeting clients at my home?
How do I calculate the % deduction for a home office?
Can you suggest security measures for disability advocates?
Are there safe ways to bring clients to your home office?
What does bonding mean?
How would bonding play into an advocacy service?
I have a homeowner's policy, will this protect my business?

Not completely! Many homeowner insurance policies do not cover a business within the home. Therefore, if someone were to break into your home and steal your business computer, your homeowner's policy may not cover the loss. It would be a good idea to check with your current insurer to see if you are covered. If not, ask to purchase a rider which will protect your business equipment.

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How can I document my home office?

A person documents his business because he plans to deduct home office expenses at tax time. It is not unusual for the IRS to ask the business owner for proof that he/she is operating a home business. You can document your home business by:
1. Having business mail sent to your home. If the letters are addressed to your business, this establishes your home as the site location of the business.

2. Using your home address on your business letters and business cards.

3. Having customers visit your office. Document the visit with a sign-in roster.

4. Purchasing a separate phone line for the business.

5. Photographing your home office or using a diagram of your home to show the percent used for business.

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Can you suggest alternatives to meeting clients at my home?

There are several alternatives to meeting with clients at your principal residence. In our course, we suggest that female advocates meet with clients in public or in a mutually comfortable environment. You also have the option of renting temporary space for meetings or joining a business incubator program.

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How do I calculate the percent deduction for a home office?

There are two methods of calculating the percentage of a home that can be deducted as a business expense. These are the square-footage and number of rooms approach. In both approaches, you take the size of the business portion and compare that to the total size of the home. That number is the percentage that can be deducted.
Example: Your home is 3000 square-feet. Your office space is 1000 square-feet. The total deductible percentage of business space is approximately 33%. Most business owners use a room within their homes exclusively for business. The owners then deduct whatever percentage of the house the room represents.

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Can you suggest security measures for disability advocates?

Security is always a concern in today's world. Here are a few security suggestions:
1. If you meet with a client, let someone responsible know about your plan.

2. Leave a written copy of your schedule at your work site.

3. Be expected at another personal engagement just after your meeting with a client of concern. Make sure the client knows about your plans. In this case, you would be immediately missed and less likely to be attached.

4. Carry a cell phone.

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Are there safe ways to bring clients to your home office?

Yes, there are many things you can do. Here are a few suggestions:
1. Allow scheduled meetings only at your residence.

2. Use your home for meetings only if its design allows you to separate office from private space.

3. Do not leave valuables lying around where a visitor might see them.

4. Keep meetings focused and professional at all times.

5. Have someone else in the home whenever your are holding meetings.

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What does bonding mean?

Bonding is a form of insurance used by a business owner to protect against special kinds of losses. Bonding is commonly used to protect an employer from employee-related theft.

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How would bonding play into an advocacy service?

If you intend to have employees acting on behalf of your company, bonding might be appropriate. If the employee will be entering your customers' homes, bonding becomes even more desirable. In most states, the employer will be held at least partially responsible for the illegal actions of employees. If your employee robbed a customer, bonding insurance would help to mitigate losses.

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