When working as a handyman or construction worker, you can often take advantage of several tax breaks along the way. With these tax deductions, you can significantly lower your taxable income and also your tax liability as a result. Keeping track of your expenses is essential to get the most out of your tax deductions.
Supplies and Equipment
When you work as a handyman, you will most likely spend a large portion of your money on supplies and equipment. You must have several different types of tools and equipment before you can do your work. When you purchase equipment for your business, you can deduct it from your taxable income for the year. Any business-related supplies are also deductible when you file your taxes. Be sure to keep your receipts for these purchases so that you can prove your purchases if you get audited by the Internal Revenue Service.
When you work as a handyman, you may have to travel all over your area to get to job sites. This inevitably costs you money in many different ways. When it comes to filing your taxes, you can also get a break for these costs. One way that you can take a deduction is if you keep track of the miles that you drive for business purposes. You can deduct a certain amount of money for each mile that you drive. If you do not want to keep track of miles, you can deduct maintenance expenses for your vehicle.
When you work as a handyman, you must buy your own insurance. When you pay for your health insurance out of your own pocket, you can get a tax deduction for this as well. As long as you are not eligible for health insurance on a preplanned from your spouse's job, you can deduct the entire amount of premiums that you pay for your insurance. You can deduct for both you and your family's insurance premiums.
If you run your business out of your home, which many handymen do, you can take a deduction for a home office. When you have a home office, it allows you to deduct a portion of all of the expenses that you have for your home. For example, you can deduct a portion of your mortgage payment, your utility payments and your homeowners insurance payment. The size of the deduction depends on how big your home office is in relation to the rest of your house.