It’s that time of year again, tax time; and if you don’t have a home-based business you are missing out on A LOT of money. In the words of Sandy Botkin, in the book “Lower Your Taxes – Big Time”, the first chapter is titled: “Why You Would be Brain Dead Not to Start a Home-Based Business.”
There are really two sets of tax laws in the US, one for employees and one for small or home-based businesses. In fact, a home-based business will provide more of an income for your family than a second part time job. Reasons: your family income if filed jointly, will establish which tax bracket you will be in, therefore your state and federal taxes will increase. You will also be paying social security tax on this income. Then all the additional expenses, which aren’t tax deductible such as car expenses, child care, lunches and/or dinners out, will all start adding up.
With the correct home-based business you will have legitimate, legal tax deductions that could save you between $2,000 and $10,000 per year.
So what types of deductions will you be able to write off? (Assuming you keep the mandatory receipts and do it correctly.)
Meals Entertainment Season Tickets Spouse’s Meals Home Entertainment At home parties Business Travel & Turning Vacations into an Expense Vehicle Expenses Mileage Shipping Costs Cell Phones Training
Business use of your home such as: Mortgage, Interest, Insurance, Utilities, Repairs, Depreciation
In addition, if your home-based business generates a loss in the first few years, you are able to use that loss against other income.
I hope I gave you a little insight into saving some of your hard earned money from “The Man.” If you’ve ever thought of owning your own home-based business, or just pay too much to Uncle Sam, but not sure where to go from here, leave your email below and I can give you some suggestions.