There’s a lot going on this season that can feel overwhelming—not only is there fear and anxiety surrounding COVID-19, but we’re seeing a tumultuous stock market. AND it’s tax season.
With fear on the minds of many, it’s important to assuage that fear wherever possible. We’ll use tax season as an example since it hits close to home:
The home office deduction.
To this day, there are still accountants that will encourage entrepreneurs not to take the home office deduction—usually because they’re worried that it will raise red flags.
The underlying sentiment is fear. These accountants are afraid of the IRS. And it’s this that fear prevents them from acting in the best interests of their clients.
Because when we act out of fear, we act quickly, zooming in on the problem rather than zooming out. We don’t see the problem for what it is.
As Tom Wheelwright, of WealthAbility, shares, the tax code is built with incentives for entrepreneurs, not disincentives. As such, you’re entitled to take deductions that are available, so long as you follow the rules.
How can you legally take the home office deduction?
Own a Business
To qualify for the home office deduction, you must have a business. It doesn’t have to be huge, it just has to exist.
Give the Office a Business Purpose
Your home may not have a business purpose, but your office must. Designate an area in your home to be used solely for business purposes, and then use it for work. If you’re not using the space solely for work, you can’t deduct the space.
It Must Be an Ordinary Expense
Essentially, this means that the expense is typical in your line of work. For most businesses, having a home office is typical—so much so that the deduction doesn’t raise the same red flags that it used to.
It Must Be Necessary
Ask yourself if your home office is necessary for your work—does it help you increase profits, prevent losses, or increase market share? For most entrepreneurs, a home office is a necessary means of boosting productivity.
Exclusive Business Purpose
If you’re using the space for business, it must only be used for business. While this doesn’t have to be a separate room, it must be a designated area.
With those five steps, you can legally save thousands of dollars on your tax bill. Don’t let fear take control.
Instead, when faced with a problem, try zooming out and examining the whole situation for solutions.
So, How Does This Connect to the World at Large?
When it comes to current events, we must shift our focus from what we can’t control to what we can control. Because life is always accompanied by uncertainty, and our power lies in how we respond.
We should seek control wherever possible. It starts with your mindset.
For some, remaining positive can be more challenging, so here are a few ideas to take control of your mindset:
What separates some of the most productive people from the pack, is their ability to see the good around them. That means, when the world around them is in turmoil, they’re staying laser-focused on the good. And when we can recognize that, our ability to focus becomes a little bit better.
We recommend looking for things to be grateful for, no matter how small, and writing them down. Get really specific with what you write, listing exactly what you’re grateful for and why.
That way, when you need a boost, you can refer back to the things that matter most.
By this, we mean not only should you filter out thoughts of fear but you should intentionally choose what you read throughout the day. We recommend looking at the news only once a day, preferably in the morning, after doing something inspirational (reading, practicing gratitude, etc).
When you’re reading the news, check only one national/international source, as well as one local source. It may seem prudent to stay plugged in constantly, but focusing for too long can actually hinder your productivity.
Better yet, don’t look for facts on social media, and take frequent breaks. The Facebook echo chamber can quickly put a damper on your mood. If it begins to overwhelm, logout.
Look to other activities for mental respite—take a walk, work on a puzzle, read a book.
Whether you regularly work from home or are finding yourself in a makeshift home office, make the most out of technology. We can all get sucked into social media, but the internet offers so much more than that. Here are just a few ideas for productivity:
- Take your conferences online using Zoom.
- Level Up. Take this time to brush up on a skill. YouTube and LinkedIn are great resources for online education. Truth Concepts Academy is a great way to dive deep into the Truth Concepts software.
- Escape—do something to take your mind off of global events. The possibilities are endless.
Jump Into Work
If you’re finding yourself with extra time on your hands, throw yourself into projects you’ve always wanted to do. Write your book, paint your living room, record your podcast—it’s really up to you. Do what energizes you and excites you.
This is a great way to remain positive, and may even give you the chance to finish something you’ve been putting off.
All in all, these are just suggestions—but we hope you take them to heart. This way, you are in control of your mindset, the most powerful tool at your disposal. Don’t let fear take control of the reigns.
Because, as the home office deduction shows, when you zoom out and look at a problem from all angles, you can deconstruct the fear. And doing so leads to real solutions.
Stay safe, and stay healthy.