TAX BENEFITS OF THE HOME-BASED BUSINESS

Taxes! What are you doing today to control the single largest drain you have on your income? One powerful answer is a Home-Based Business. There are several great reasons why the home-based business segment of our economy is growing exponentially. It is currently 50 million strong and increasing at approx. 125,000 new businesses per month.

Believe it or not, (and I don’t recall getting the memo from the IRS), Congress actually wants you to be in business and often passes new laws favoring the home-based business arena. That begs another question: why would congress want you to have a home business? Because it stimulates the economy and helps build a strong America. The way it does that is simple. Each time you buy a new product for your business, it goes through the economy several times by way of sales, production, manufacturing, assembling parts and much much more.

Many ex-IRS agents have said that nobody takes all the tax deductions they deserve. Why is that? Much of it is fear of the IRS, but a very large factor is lack of knowledge. With a little understanding, you will quickly discover that having a home-based business truly can be the #1 strategy in America for reducing your taxes. You can even learn to CONTROL your tax liability by setting up legal entities that will put a person in the same league as the big boys with major corporations, all from the comfort of your own home and in your pajamas if you choose to do so. By developing a few good habits right up front, you will receive substantial dividends for years to come.

The typical wage earner has very little left he/she can deduct as individuals, especially without deductions for a residence or dependents. By finding the right home business that fits your life style and setting up a good solid foundation in the home, you will discover new deductions immediately, including offsetting your taxes from W-2 wages, and also those of a spouse. This strategy could amount to thousands of dollars annually, resulting in payment of little or no taxes at all. It’s like getting an automatic pay raise without asking your boss.

The home office deduction also offers enormous tax advantages. Again, fear of the IRS may deter some business owners from claiming the home office, even though the IRS is rumored to have relaxed a bit on this issue. Use the deduction. You deserve it! Even without a designated room, you can still deduct office furniture, equipment and supplies. It depends on what you need to legitimately run your business.

A special note here: it is absolutely critical to have a daily tax planner tracker with you at all times, and use it consistently. You will keep track of appointments, and record all your business and mileage expenses. Not only will it help you to be more accurate in keeping your record of expenditures, but it could stop an IRS audit very quickly when an agent see’s your detailed and accurate entries.

Now the fun can begin. You should be able to find an additional five to ten thousand dollars a year in new deductions as a real savvy individual. This makes a home business look attractive for literally every American even if they live overseas. From the beginner to the very wealthy, everyone can benefit. And I know several prominent people who have set up home businesses for this very reason.

Other deductions that should jump out at you are fully deducting all medical and dental expenses, hiring children, converting some personal to business mileage, deducting meals, entertainment and travel. Employing a spouse, educational assistance plans, qualified pension plans, many section 162 expenses which are just ordinary business expenses. There are hundreds of them.

Now, if you really want the best of both worlds and to maximize all personal and business deductions, a home-based business entrepreneur can also set up legal entities like LLC’s and corporations. And if you want to optimize your tax strategies you can set up your network marketing business in a tax-free state instead of your home state because it is classified as interstate commerce.

By setting up entities, with a little guidance, you can take every deduction and fringe benefit that major corporations do all over the country. And it doesn’t have to be complicated.

Having a HBB really can change your life. It can be simple, effective and save you thousands year after year. Now you can take the rewards of enjoying more family time, church time, travel and enjoying friends. And thanks to Uncle Sam, much of it can be deductible. As a side note, this is a great way to add security and reduce stress by making you lay-off proof from your regular job.

You can take control of your life by having a home-based business, the last great tax haven. You will never want to be without it again.

By: Jerry McMullin