Keep More of Your Money with a Home Business Tax Deduction

A home business tax deduction is one of the best ways to keep more of your money. First lets get the disclaimer out of the way. I am not an attorney or CPA and the following is not legal or financial advice. With that said, I have owned and operated my own business for over twenty-five years and have had extensive interaction with those two professions. Earning a profit is a difficult task. Much more difficult is the task of keeping that money in my own pocket. Not only do I pay exhorbitant taxes at every level but governmental legislative actions have created an anti- business climate in America. My construction business is subject to laws such as the Family Leave Act, OSHA, Americans with Disabilities Act, Clean Air Act, and numerous other rules and regulations subject to interpretation at the whim of some official. While I agree with the intent of many of these laws, the effect is the closing of American businesses and the loss of American jobs. The exception is the trial lawyers who are feasting on businesses that unwittingly violate some obscure regulation.

The situation for employees is just as dismal. Workers who are lucky enough to keep their jobs are not receiving the promotions and bonuses prevalent in years past. Many companies are dropping health insurance due to the enormous increases in premiums. The courts are now allowing supervisors to be sued personally if the regulations are not followed. A frivolous lawsuit can now ruin the financial stability of the entire family. More wives are working outside the home since it is almost impossible to make ends meet on one income. Unfortunately the average working mother contributes very little to the family bank account. One study estimated that the actual take home pay of a working mother with a yearly salary of $15,000 was only $1,156.

The solution Carolyn and I found was to start a profitable home business. The main advantages of a home business are that they are exempt from many government regulations and many otherwise personal expenses automatically become a home business tax deduction. This may be your first business opportunity and and I am confident that your hard work will produce a money making enterprise. I would like to share a few tips that will keep you from getting a nasty surprise next April 15th.

Your first step is to invest in a computer program to keep track of your home business. We use Quickbooks because it is cheap, adaptable to any business, and can be readily networked. Having everything in one system allows you to import all of your information into a tax program at the end of the year. I no longer stay up all night on April 14th. to beat that dreaded deadline.

Now you are ready for some specific ways to reduce your tax burden. If you have two cars, set aside one of them strictly for business. Order magnetic signs, place them on the car and take pictures. Be sure to keep a log of your miles and the business purpose. Carolyn and I just returned from a week in Las Vegas. The cost is tax deductible since we attended classes at a convention and we both participate in the business. Business income can be transferred to children or parents that are in a lower tax bracket. They must actually perform some work and the payments must be reasonable. Computers, automobiles, desks, and any other equipment used in the business is eligible for the depreciation deduction. This is true even if you purchased the items years ago.

This is just a quick overview of the many ways a home business can improve your financial picture. Remember that it is a business and keep the proper records. Don't be afraid to ask for advice. There are many resources available on the net for free. The IRS is accessible at www.irs.gov. GosmallBiz.com has an extensive free area and their paid service allows unlimited access to professional consultants. Internet Tax Helper has a program designed especially for online home businesses.

If you already have a home business, then be sure that you are taking advantage of everything the law allows. If you don't have a home business, then what are you waiting for?

Click here to go to the Home Business Interview. One of our business coaches will contact you promptly to discuss The Perfect Home Business for you.

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