A good majority of people fear tax season when April 15th rolls around, but I
actually look forward to it and become almost excited. The reason is not because
I enjoy filling out lengthly forms and paying the government large sums of
money, but because it’s only during tax time that I fully realize how much
tax
savings my small home based business saves me every single year.
Most people procrastinate by doing research and wondering whether their
business idea even has a chance, but they are missing the point. They don’t
realize how much
tax savings can be gained by
operating a small home based business even if it initially is not profitable at
all. So if you are even mildly curious about pursuing a business idea, you must
take action and give it a try if not for tax savings benefits alone.
Not operating a small home based business, allows the government to tax your
earnings at a much higher rate. All of your earnings get taxed as ordinary
income (up to 35%) before you are even allowed to spend it. With a small home
based business, you get to spend your money first and only get taxed on what is
left over.
The best part is that even if your business is losing money on paper, you can
pass these paper losses from your business directly to lower your own taxable
income! Either way, your net worth benefits whether you are profitable or
not.
What Expenses Are Deductible?
The IRS code states that any “ordinary and necessary” business expenses can
be deducted from your business income prior to being to taxed. For
the
Savings Highway business, this includes computers, office equipment,
machinery, office supplies, utilities and much more. In addition, by planning
your vacations around your business trips, you can save a lot by deducting
travel and entertainment expenses as well. The general rule is that as long as
the expense is made for business and not personal purposes, you can deduct it
from your business income.
Small Business Deduction Guidelines
Naturally, the IRS has put into place many rules and regulations on what can
be deducted on your tax return. Otherwise, some small home based businesses
would abuse these deductions over and over again. The following is a partial
small home based business tax deduction guide along with an outline of the most
commonly taken small business deductions.
Keeping in mind that I’m not an accountant or a tax lawyer. The following
information is only a guideline and not taken as fact. Tax codes are constantly
changing and your current tax advisor must be up to date with the tax code
before deducting any expenses associated with your business.
Very few expenses are "always deductible." In most cases deductibility
depends on why you incurred an expense, how you intend to use the product or
service purchased, whether a purchase was exclusively for business use or
partially for business use, etc
What Exactly Can You Deduct?
AUTOMOBILE USE: Your automobile can net you a deduction of 40½¢ per
mile or more when used for business. That's a tax savings of more than $2,000 if
you drive your car 5,000 miles for business purposes.
+Estimated
Tax
Savings:+ $2,500
VACATIONS: With the proper combination of knowledge and planning, your
non-deductible "vacations" could be converted into tax savings "business trips.
This deduction is worth between $2,000 to $3,000 a year for almost anyone who
takes annual vacations. It's 100% legal, but you have to follow some simple
rules.
+Estimated
Tax Savings:+$2,500
CURRENT HOUSEHOLD EXPENSES: If you use a portion of your home
exclusively and regularly for business purposes, then a percentage of your rent
(yes, finally renters get a tax break), utilities, homeowners or renters
insurance, general maintenance and upkeep, cleaning services, and other
"indirect expenses" that you are already paying for in after-tax dollars, could
be converted into tax savings business expenses. This deduction alone may
entitle you to deduct $4,000 to $5,000. Some restrictions do apply so make
yourself aware of them.
+Estimated
Tax Savings:+$4,500
HEALTH CARE COSTS: If you employ any family member part-time in your
home-based business, and provide a formal, legally structured "Employee Benefit"
called a "Self-Insured Health Cost Reimbursement Plan," you could deduct, as a
business expense, every dollar spent on any kind of health care that is not
reimbursed under any insurance policy - for your entire family (which includes
YOU). This tax savings is worth an average of $3,500 for the typical family of
four. There are a few important steps to setting this up.
+Estimated
Tax
Savings:+$3,000
COMPUTERS, PHONES, ETC. Equipment which you purchase specifically for
use in your small or home-based business, can now be fully depreciated in the
year of purchase. This applies to computers, fax machines, printers, routers,
scanners, digital cameras, cellular phones, office furniture and most other
business equipment.
+Estimated
Tax Savings:+$25,000
MEALS & ENTERTAINMENT: Pick up the tab for dining with or
entertaining potential clients, customers, prospects or anyone else who could
contribute to the success of your business, entitles you to deduct 50% of the
cost. Under certian circumstances, you may also be able to include your spouse
and kids, and deduct their expenses also. Do you know how to deduct the cost of
your own meal without picking up the tab for the person you talked business
with? These are all 100% legal deductions, IF you know and follow some simple
rules.
+Estimated
Tax Savings:+$5,000
EVEN THE "ALLOWANCE" YOU PAY YOUR KIDS! Federal Tax Court has ruled
that a child as young as 7-years-old can perform meaningful services as an
employee of his/her parent(s) in a home-based business. The wages you pay your
children are tax deductible for you as a business expense, and the income to the
minor is tax-free (up to $5,000 per child, per year). The rules are very
specific, but easily followed.
+Estimated
Tax
Savings:+$7,500
What Should You Do NEXT?
Join
The Savings Highway TODAY
I'm Jim Roche of NJ, Savings Highway Member. When you join
the
Savings Highway, I will show you how much you are probably overpaying your
taxes right now by NOT having a Savings Highway business... (the answer is
$5000-$6000 a year!)
And I'll show you how you can get Uncle Sam to pay for the costs of joining
and for operating your Savings Highway business!
When you find out that a Savings Highway home-business will put an extra
$400-$500 a month extra cash in your pocket just from the tax savings, you
should be ready to sign up for the
Savings Highway for this reason
alone."
Contact Me:
Jim Roche NJ
(908)413-5363
http://thesavingshighway.com
http://taxsavingshighway.com
Skype Id= jim.roche3
<!--Session data-->
