Many small entrepreneurs in Brazil operate their businesses from home, but few know that certain expenses can be deducted from taxes. Proper tax planning allows home-based businesses to legally reduce taxable income and increase profitability.
This article will explain which expenses are deductible, how to report them, and tips for maximizing tax savings.
1. What Business Expenses Are Tax-Deductible?
✔ A portion of rent or mortgage (if a dedicated workspace is used).
✔ Electricity, water, and internet bills (only the percentage related to business use).
✔ Office furniture and equipment (computers, desks, printers).
✔ Business-related supplies (paper, ink, software subscriptions).
💡 Tip: Keep invoices and receipts to prove expenses in case of an audit.
2. How to Deduct Expenses in Simples Nacional
✔ Businesses under Simples Nacional cannot deduct most operational costs directly but can reduce taxable income by reinvesting in deductible expenses.
✔ Some municipalities allow ISS tax reductions for home-based businesses.
3. MEI: Can You Deduct Expenses?
✔ MEIs do not have official tax deductions, but keeping track of expenses helps in financial planning and profitability analysis.
4. Tips for Maximizing Tax Deductions
✔ Keep business and personal expenses separate.
✔ Use accounting software to track deductible costs.
✔ Consult an accountant to ensure proper classification of deductions.
5. Final Thoughts
Home-based entrepreneurs can legally reduce tax costs by deducting business-related expenses. Keeping organized records and following the correct procedures ensures maximum savings and financial stability.
