Home Business Tax Advantages
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Economic Recession Creates Work From Home Boom
Home business and taxes is not a subject we see much about online. What many people are not aware of is that a home-based business can actually save you hundreds, if not thousands of dollars in tax deductions.
We all have to (and should) pay our taxes. But as Ronald Mueller, MBA, Ph.D. says "It’s how much you keep that counts, not how much you make".
Home Business Tax Benefits: Why Tax Breaks?
President George W. Bush said "Small business is the backbone of the American economy". Small businesses create as much as 70% of the U.S. job growth.
Even a part-time home business can qualify for more tax benefits than any other category of taxpayer. Deductions can be retroactive; Tax deductions and write-offs now available to taxpayers who operate a small or home-based business, also apply to the past 3 tax years.
These are legitimate tax breaks that are authorized by the U.S. congress, published in the IRS code, and approved by the Federal Tax Court rulings.
As a Home-Based Business Owner What Can You Write-Off?
1. Business use of your car or truck
2. Cell phone and other electronic devices
3. Business travel with your family (vacation)
4. Portion of your rent/mortgage, repairs, home maintenance
5. Gas, electric, other utilities
6. Meals, entertainment
7. Computers, equipment, furniture
8. Marketing tools, supplies, meetings
9. Hire your children to work in your business
10. Many other deductions are available
If you meet these four requirements, you probably qualify for thousands of dollars in tax savings – every year.
1. Have a legitimate home-based business – consulting, child care, direct sales, internet marketer, and MLM network marketer.
2. Profit – show your intent to make a profit, you do not actually have to make a profit to take these deductions.
3. Treat your business as a business, not a hobby. Work on a regular and consistent basis.
4. Document your income, expenses and activity. Usually brief notes are adequate.
A home business is a great way to achieve financial security, and you don’t even have to wait until the fifteenth of April to get your money.
If you are still working at a regular job, you may be able to increase your take home pay by as much as $300 to $600, maybe more. Just go to your employee payroll office and up-date your W-2 (based on your additional tax savings with a home business) to increase your take home pay.
Many times financial concerns keep people working because they feel they cannot afford to start a home business. The truth is that frequently these savings are enough to pay for the start-up cost of your home business.
Home-Based Business Structure
A sole proprietorship is the easiest form of business ownership to organize. As a sole proprietor you are in control, and within the parameters of the law, make all decisions as you see fit. Sole proprietors receive all income generated to keep or reinvest. The profits from the business go directly into the owner’s personal tax return.
To take advantage of these home business tax benefits, consult with a tax expert who is familiar with home business tax laws.
After 35 years in practice Dr. Enders closed his Chiropractic Clinic to pursue a career in Network Marketing. He soon realized that if your business is not on the Internet, you're not in business. In his search to learn Internet Marketing Dr. Enders discovered Renegade Professional and the principle of attraction marketing
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Comments: 10 
About the Author: Dr. David Enders
Member Since: 10/10/2007
Company: Mannatech, Inc.
Industry: Coach
Primary Web Site: http://www.renegadecoach.net
The Benefits of Business
Having your own business is always smart business.. David this is a great reminder of why each of us needs to consider starting a new business. Not only for creating ones own economy but to take advantage of these tax advantages that our government does allow us.
Protecting what we have now will benefit us in the future. This is money making money.
I look forward to Tax Time!
Not too many people say that. With my business most everything is a tax deduction. I even deduct travel by working at my destination. Since I have had my home business every year I get a nice bonus in February - something to look forward to each year...Oh Yah - it is almost here!
Good Records Keeps You Out of Trouble
True wealth is only achieved by being in business for our self, and when we pay taxes it means we're making money. Business deduction helps us keep more or it.
The tax benefits for business owners, is only an advantage if you keep good record, and receipts of your expenses. Small business are more likely to be singled out for a IRS Tax audit.
The Secrets Of Tax Advantages
I can certainly attest the tax advantages of having your own business having had one for over 20 years now. I think if more people knew what the government allows as far as write offs when you own a business more people would think about starting one.
Just make sure you keep good records hold on to those receipts and above all else find a good CPA who knows your business and what tax write offs are allowable buy law. Oh, and also make sure you're incorporated and keep personal expenses separate from business activities.
Advantages
As Kevin said, I too can attest to the advantages of having a home business. Having had a business in my home for 14 years has allowed me to write off a portion of everything I do here. Having a good CPA has been wonderful. I do the books during the year and then she finds all the money I'm getting back. Pretty sweet!!
Great article! Thanks for sharing.
Michelle
I Pay an Accountant
I am so thankful for our homebased business when it comes to tax time.
We are looking to upgrade my car, and I'm planning to use my business number for it.
I pay an accountant to do all the bookkeeping to save the expenses of a potential divorce... neither of us have a clue for that kind of work.
It's sweet that the accounting bill is a tax credit. There's no end to tax credits in owning your own business.
Benefits Of A Home Business
David,
Very informative article. This article gives in great detail the benefits of a home business, "Tax Deductions."
As a entrepreneur, David I really enjoy this part of the business,"having the ability to use tax deductions."
Thanks For The Great Tips...
Donna Wells
A Major Factor in Starting a Home Business.
Very good article, David. Tax benefits should not be the only reason one starts a home business. However, it is a very important factor to consider.
I recommend that network marketers use a tax accountant to do their taxes. The accountant should be one who has good experience working with network marketers.
As several have said, it's critical to keep proper documentation and receipts on all expenses. Thanks for the information, David.
Business Structures
While the sole proprietorship is the easiest business structure to form, it is also open to the most risk. I found the book Lawyers Are Liars: The Truth About Protecting Our Assets by Mark Kohler to be very helpful in understanding the different options that are available. The author is a CPA and a lawyer who does a great job of explaining how to go about deciding which one is right for your particular circumstances.
Thanks Rana
Thanks for the info on the book by Mark Kohler, sounds helpful. Each person's situation is different, that's why they should get good legal and financial help to determine what is best for them.