Self-employed people do have a little bit longer to file a tax return - until June 15. However, if you owe the government money and file after April 30th, they will start adding on the interest. As you prepare your paperwork for your tax return, here are some deductions to keep in mind:

Working from home is an easy commute in the morning and since it is your principal place of business, you may be able to claim some of your home expenses. Depending on the amount of space you use for business and/or client meetings, you can claim a prorated portion of your utility payments, property taxes, mortgage interest and maintenance costs. It is important to remember, only mortgage interest is deductible - not your mortgage principal.

Office supplies like paper and staples are fully deductible. Bigger items such as computers and office furniture must be depreciated over a number of years according to the Capital Cost Allowance (CCA) rules. CCA rate for computers and computer equipment was increased to 55% effective March 19, 2007. Don't forget you can only deduct half the annual rate in the first year. So if you purchased a computer for $1,000, you would only be able to deduct $275 against your business income in the first year. In the second, you can deduct 55 per cent of the balance remaining, or $398.75 (calculated as $725 x 55 per cent).

You are allowed to claim a portion of your auto expenses that relate to the business. This includes gas, maintenance, auto club membership, license fees and insurance. It is important to document vehicle use for both personal and business travel so invest in a log book or record system to keep track. The rules may change for 2008 based on the last Federal Budget. There are limitations on how much you can claim for luxury vehicles. The ceiling on CCA claims for 2007 is $30,000 plus GST and PST. And if you want to lease, the ceiling is $800 per month plus GST and PST.

Insurance and health benefits are another concern for self-employed people. If you opt to pay for a private health service plan, you may be able to deduct the premiums as a business expense. To qualify, either your self-employment income must be 50 per cent of your total income or your income from other sources must be $10,000 or less. The maximum deduction is $1,500 for yourself, $1,500 for your spouse or common-law partner, and $750 for each or your children under 18. To learn more about a private health services plan check out Brock Health

Mark Styranka is the owner of Exciting Destiny.com. He writes on a variety of topics but primarily relating to money making secrets for the stay at home business. To learn more about how you can work & stay at home, Mark recommends that you visit:
http://www.ExcitingDestiny.com
http://www.SuccessUniversity.com

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