Do you have a home office but you do not claim it on your tax return? Chances are that you don’t do it because of the additional recordkeeping and the cumbersome 43-line long tax form 8829. Here is some good news for you from the IRS! Starting on 1 January, 2013, the IRS has a new simplified alternative for the home office deduction. This new “safe harbor” method is as easy as measuring the square footage of the area of your home that you use strictly for business purposes. The deduction is $5 per square foot and limited to a total area of 300 sqft. This means that the maximum you can deduct for your home office is $1,500. Previously, you had to allocate expenses between personal and business use of your home which would also mean a smaller share of itemized deductions on your schedule A for property taxes and mortgage interest. If you prefer, you can still use the long form 8829 if the actual expenses give you a better deduction. You can even decide to use actual expenses one year and use the safe harbor method the next year. Once you have made the selection for a particular tax year, you cannot revoke it though.
Like the long form 8829, the safe harbor method can be used by both renters and homeowners. Whatever method you use, just remember that the home office must be used for business purposes only. For example, if you use the extra bedroom as an office and nothing else, you can use the home office deduction. However, it that same bedroom doubles as a bedroom when guests come over or the family watches TV in it in the evening, the home office deduction cannot be used because it is not used exclusively for business.
Brand assets, everything from business cards, stationery items to a website, are must-haves for a startup. Every brand asset should include your company name and logo, so make sure you have a lawyer trademark your name and logo, or at least do a quick search to be reasonably sure of trademark success before spending money on logo design and items like business cards. In addition to physical brand assets, have a digital letterhead designed, especially if you need to wait a while to order a full stationery package.
If you need to prioritize ordering physical assets, keep business cards high on the list. Your business card is the most important piece of this package. Think of it as your one solid marketing/advertising piece of collateral other than your website. Go for a business card that represents you and your company, and don’t scrimp on card stock. The first impression is critical.
Few businesses these days can operate well without a website. Buy a domain (URL) that is based on your company name or product. The URL should ideally be easy to type, but absolutely must be easy to remember. You can register a domain name at www.godaddy.com or www.register.com, and registering doesn’t have to wait until you’re ready and able to spend the money to develop a full website.
Once you have your website URL, create a holding page that includes some basic company information and a link to email you to learn more. You can begin collecting email addresses of potential customers this way; and having a website lends an air of legitimacy to your new company.
Lastly, make sure you have your “elevator speech” down pat. You need a 30-second introduction – a verbal business card – to grab the attention and interest of the people you meet. The succinct and compelling description of your company is a free networking tool you should never be without. The elevator speech is not something that can be pulled out of a hat. It needs to be thought through, precisely crafted and then absorbed into your daily routine.