Name: Anna Kahalekulu
Location: Makawao, Maui, Hawai’i
Business: Kūlua
What makes your small business unique?
Kūlua’s small team of makers is what makes it unique. When you come into our shop you can hear the hum of the sewing machine, see the patterns hanging on the back wall, and know that we’re as locally-made as it gets.
Why did you decide to start your own business? How did you get started?
I studied business in undergrad and went back to school for fashion technology at UH Maui College. I love to design and create. Before starting the brand I did custom jobs and alterations while my kids were little. I started the brand in 2015 and created our first Keiki collection that holiday season. In the early years the growth was really slow and we mainly did wholesale to a couple of boutiques in Hawai’i.
What is the biggest lesson you learned in the first year?
The biggest lesson I learned in the first year was that, as a business owner, there are times you need to really push. My own capacity, our teamʻs capacity, and the business’s capacity — there has to be a balance from those intense periods.
What was the most surprising thing about becoming a business owner?
The most surprising thing about becoming a business owner was how many things there are that youʻre responsible for.
“Being the best version of myself was crucial to effectively running the business.”
What were some things you needed to teach yourself about running a business?
I really had to identify my strengths and pinpoint both what the business needed me to spend most of my time doing along with what I wanted to spend most of my time doing. Once that was clear, I had to learn how to communicate with others and manage things well. The first two years we had our brick-and-mortar, I found myself doing a lot of self-work to get there. Being the best version of myself was crucial to effectively running the business, leading our team, and making sure my family was taken care of. Itʻs still something that I work on to this day.
How does running your own business make you feel?
Overall, running my own business makes me feel really proud of what can be accomplished when we work together with purpose and creativity.
What are some of the challenges you’ve overcome or are working to overcome?
There’s always some kind of challenge to overcome. The most important thing is learning to quickly identify the root of the problem and think through all of the possible solutions so you can assess your options and create some sort of action plan.
What advice do you have for other entrepreneurs looking to start their own business?
Believe in yourself and surround yourself with good energy.
What is your best advice to other small business owners for hiring and retaining staff?
You just have to make the best choice given the options at hand, and accept that sometimes youʻll make a mistake. Be open and honest with yourself and with others. And give yourself grace when you do make a mistake.
What challenges do you feel are unique to AANHPI business owners?
AANHPI business owners often lack access to resources, banking, and markets outside of their specific community, which impacts their ability to grow.
What are your proudest moments?
I’m proudest when I hear our team express love for the work that we do with our clients. I’m also really proud when one of our clients finds the perfect new garment that inspires them to stand a little taller and feel ready to take on the day.
What are the next big plans you have for your business?
We’re in a really sweet spot right now where we have a great team in place. I’m really excited to keep creating and making with them.
When you’re having a tough day, who or what inspires you to keep going?
Thinking of the greater “why” is what keeps me going. I started the business so I could create for our community. Yes, at the end of the day, we make and sell clothing — but I feel a sense of purpose to be the best I can be for our community, create the best garments, and put the greatest design into them.
How do you maintain a work/life balance as a small business owner?
I prioritize time for me first thing in the morning and strive to be present in whatever task is at hand, whether it’s at the studio or at home with my family.
What’s your “power song” and why?
Currently, it’s “Naturally” by Kalapana. I find it grounding and relaxing — cleansing my mind so Iʻm ready to take on anything!
This article originally appeared on QuickBooks and was syndicated by MediaFeed.org.
Home businesses tax deductions to take as a small business owner
Small business owners take on a considerable amount of responsibility. Beyond serving clients, they must also take care of all the minutiae of running a business, including keeping track of expenses they can deduct as a small business owner.
Fortunately, small business owners and entrepreneurs who use their home for work can benefit from various home business tax deductions that help them reduce their taxable business income. Common deductions include office supplies, software and internet access, but deductions can vary widely depending on the type of home business you run.
- Who qualifies for home business tax deductions?
- 25 home business tax deductions for your small business
- How to write off home business expenses
StockRocket/istockphoto
If you run your business out of your home, you may be able to deduct expenses for the use of your residence on your taxes for your small business. The home office deduction can be utilized by homeowners and renters, and any type of residence can qualify (single-family home, condominium, manufactured housing, etc.).
To qualify for the home office deduction, your home business activities must meet the following criteria:
- Regular and exclusive use. According to the IRS, you must “regularly use part of your home exclusively for conducting business.” In other words, you must have a space in your home that you use only for business purposes, such as a home office or extra room that is used only for business and never for personal use.
- Principal place of business. To qualify for the home office deduction, your home also must be the principal place your business operates from, although there are exceptions. The IRS reported that you may qualify for the home office deduction if you also have a business location outside of your home, provided you use your home for a substantial component of your business. For instance, if you conduct business in another location but have meetings with clients or patients in your home, the IRS allows you to deduct expenses for the part of your home that you use “exclusively and regularly” for business purposes.
There are some exceptions to these rules, including for those who run a home daycare. If your small business involves watching children in your home, then it would be impossible to meet the “exclusive use” criteria if you’re watching children in your own living area. To qualify for this exception to the exclusive use rule, you must provide daycare for children, persons age 65 or older or persons who are unable to care for themselves. Additionally, you must have “applied for, been granted or be exempt from having a license, certification, registration or approval as a daycare center or as a family or group daycare home under state law,” noted the IRS.
Suradech14/istockphoto
If you’re eager to reduce your taxable income this year, figuring out which home business tax deductions you can take is a smart first step. Here are 25 common deductions you may be able to qualify for.
monkeybusinessimages/istockphoto
Business supplies and office expenses, such as office furniture, printer paper, pens, calculators and business cards, are deductible provided they are for business use. According to the IRS, business expenses must be both ordinary and necessary, meaning they are “common and accepted in your trade” and “helpful and appropriate,” though not necessarily indispensable.
Ridofranz/istockphoto
Small business computers and software you need to purchase for your business, including small business accounting software, should be tax-deductible business expenses provided these purchases are ordinary and necessary for your business to remain in operation.
monkeybusinessimages/istockphoto
You may also be able to deduct home repairs and maintenance performed on your place of residence, but only for the part of your residence that is used exclusively for business purposes. According to the IRS, an example could include “painting or repairs only in the area used for business,” like a new coat of paint or replacement flooring in your home office.
dima_sidelnikov/istockphoto
You can deduct the business portion of your rent as an expense if the property you rent is for use in your trade or business. However, you cannot deduct rent as a business expense if you have or will receive equity in or a title to said property. Per the IRS, rent is defined as “any amount you pay for the use of property you do not own.”
In terms of depreciation, the IRS said that you can typically deduct depreciation on the business use portion of your home as well, in an amount up to the gross income limitation over a 39-year period.
monkeybusinessimages/istockphoto
If you have a home office, your house utilities will also be required for your business. As a result, you can deduct a portion of your utility bills, such as gas and electric bills. However, you can only deduct a portion of these expenses since, obviously, part of your utility bills are for personal use.
m-imagephotography/istockphoto
If you use your car for business purposes, you can deduct auto-related expenses for the business use of a car. The IRS also reported that, if you use your car for both personal and business use, you must divide your car expenses based on the mileage you drive for personal and business purposes.
FlamingoImages/istockphoto
You can also deduct mileage for all travel related to business. The IRS offers a table of standard mileage rates and mileage deduction rules you can refer to for the last several years, including mileage expenses for 2020.
tommaso79/istockphoto
You can also write off employees’ pay as a small business owner. This is true even if you operate your business out of a home office.
KapturePhotoSolution/istockphoto
You can also deduct contributions to retirement plans, including tax-advantaged retirement plans for the self-employed or small business owners, such as an SEP IRA or a solo 401(k).
LightFieldStudios/istockphoto
If your business is paying interest on a credit card or loan that you borrowed for business activities, you should also be able to deduct this interest as a business expense.
Liderina/istockphoto
According to the IRS, you may be able to deduct various federal, state, local or foreign taxes that are directly related to your trade or business.
chatsimo/istockphoto
You can typically deduct the cost of business-related insurance products you pay for, provided they are applicable to your trade or profession.
SamuelBrownNG/istockphoto
If your business creates products or purchases them for resale, you can typically deduct the cost of these products or the costs involved in manufacturing them. This can include the cost of raw materials, freight, shipping, storage, direct labor and more.
chachamal/istockphoto
Thanks to the Tax Cuts and Jobs Act of 2017, you may be able to deduct up to 20% of your qualified business income on your taxes. This deduction does have limitations based on your trade or business as well as how much you earn, however. Specifically, joint tax filers with incomes below $315,000 and other filers with incomes below $157,000 can claim this deduction in full provided they work in a qualifying industry. For 2018, joint tax filers with incomes between $315,000 and $415,000 and individuals with incomes between $157,000 and $207,500 were subject to phase-outs.
Jelena Danilovic/istockphoto
If you use your home for business purposes, you can generally deduct cleaning services and supplies that you purchase for the business-related portion of your home.
AndreyPopov/istockphoto
If you own your home and have a home mortgage, you can deduct a portion of your mortgage interest on your business taxes. Deductions are based on the percentage of your home that you use for your business. If your lender requires mortgage insurance, part of that can be deducted as well.
rrecrutt/istockphoto
Business-related travel expenses can also be taken as a business expense. This could include travel to meet with clients or to professional education or training events.
jacoblund/istockphoto
If you pay for professional services, such as legal advice or tax preparation, these expenses can be deducted as business expenses.
Jacob Ammentorp Lund/istockphoto
If you pay for marketing help or a business coach, these expenses can be deductible from your business income.
shironosov/istockphoto
If you ship items for business purposes, shipping costs can be deductible on your taxes. The same is true for postage when used for business purposes.
Chaay_Tee/istockphoto
A security system that protects the doors and windows in your home from intruders can also be partially deductible as a business expense, provided part of your home is used for business purposes.
Zinkevych/istockphoto
Professional memberships you pay for and subscriptions to business-related publications can also be tax-deductible.
FlamingoImages/istockphoto
The IRS said that while the first local telephone landline in your home is not a deductible business expense, “charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses.”
Ridofranz/istockphoto
Health insurance for yourself and your family is deductible as a business expense when you’re self-employed, although you do not have to have a home office to qualify for this deduction.
FlamingoImages/istockphoto
If you pay for or reimburse education expenses for an employee, you can deduct the expenses if they are part of a qualified educational assistance program, per IRS rules.
Poike/istockphoto
If you’re feeling overwhelmed by all of the home office business expenses you might have to keep track of, you should know that the IRS also offers a standardized home office deduction that requires less legwork upfront. Here are the two options you have when it comes to how to write off home office business expenses this year:
- Simplified home office deduction: Since the 2013 tax year, taxpayers have been able to access a simplified option for computing the home office deduction. This option lets you determine a standard deduction based on the square footage of your home office space, thus letting you avoid tracking and reporting all of your individual home office expenses. Of course, the simplified method isn’t perfect since you can’t take some deductions like depreciation. You also cannot carry over a loss from a previous year, which is a departure from the regular method.
- Regular method: If you keep excellent records and prefer to deduct business expenses the old-fashioned way, you are still able to do so. With this method, you would need to keep detailed records of all your actual expenses for your home office including mortgage interest, utilities, depreciation and more. From there, your deduction will still be determined based on the percentage of your home used for business purposes.
If you’re using the regular method, you should plan on using IRS Form 8829 for certain business-related tax deductions when you file your taxes. But be aware that some business expenses don’t fall under the home office deduction, so they would be deductible within other areas of your taxes, such as Schedule C or F. Examples include telephone expenses, dues and salaries.
Also note that if you use the simplified method and itemize deductions, you can deduct some expenses for your home that are otherwise deductible, including mortgage interest and property taxes, as itemized deductions using Form 1040 or 1040-SR, Schedule A.
When choosing which method to use for your home office deduction, keep in mind that both options have pros and cons. The regular method requires a lot more work, but you have the potential for a larger deduction if you have a lot of qualified expenses within a year. The simplified method is easier, but not necessarily ideal if you want to recapture depreciation when you sell your home, or if you want to be able to carry over losses. Make sure you understand each method and its limitations so you can make an informed decision.
This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.
DepositPhotos.com
Featured Image Credit: QuickBooks.
