Home Business Tax Benefits and Tax Write - Offs
Posted: Tuesday, May 06, 2008
by mtnmom5
V&D Travel
Why the Big Tax Breaks for Home-Business owners?
"The average American who runs even a part-time home-based business can now qualify for more home business tax benefits than any other category of taxpayer," according to Ronald R. Mueller, author of the bestseller "It's How Much You KEEP, That Counts! Not how much you Make".
Congress has passed laws giving THOUSANDS of DOLLARS in Tax REFUNDS and Tax DEDUCTIONS to average Americans who operate a legitimate home-based business - even a part time business - as long as they can prove they're trying to make a profit.
How do I know if I qualify for Home Business Tax Benefits?
It's really quite easy!! Just meet these four simple tests:
- Have a legitimate business such as consulting, network marketing, freelancing, child care, internet marketing, direct sales, etc.
- Prove you intend to make a profit . You do not have to actually make a profit before qualifying to take these deductions, but you do have to show you intend to make a profit. In most cases, they expect you to show a loss your first year or two!
- Work your home based business on a "regular and consistent basis" - At least 2 - 3 hours a day, 4-5 days a week.
- Document your business Income, Expenses and Activity. Brief, hand written notes in a scheduling diary is usually enough. You should be able to show some business expenses such as advertising costs, initial investment, product purchases, travel expenses , etc... Keep a mileage log for all your mileage, whether it is picking up office supplies , going to the bank. Convert all the miles you can into 'business activity'.
If you meet those four tests, you probably qualify for some big-time home-based business tax deductions, which could reduce your taxes by thousands of dollars every year....
Oh, and listen to this!
When Congress approved these tax breaks, they told the IRS:
"Don't make people wait until April 15th to get their money back."
You can even qualify for these deductions retroactively! Most of the tax deductions and write-offs now available to taxpayers who run a small or home-based business, also apply to the past three tax years. So if you had a home-business in any of the past three years, you could file an Amended Tax Return (Form 1040X), and possibly get a Refund Check for THOUSANDS of DOLLARS - plus interest!
As soon as you add up all of your tax savings, you can visit your employer's payroll office to fill out a short form that will begin putting an extra $300-$600 or more per month in your take home pay! What would it be like to have $100 or so extra cash in your pocket every week, week after week? And that's just from the tax savings! It doesn't even include the money you'll make in your home-based business.
What if I Don't Have a Home-Based Business?
A home-based business offers the best tax savings strategy available to the average American... especially for work at home moms. Many working moms are paying anywhere from $800 - $1500 a month on daycare, gobs in gas money and many other hidden costs, plus have taxes taken out of their earnings, leaving very little to show for all their efforts.
When you get started in a home based business, most of those added expenses can be avoided, and taxes greatly reduced. With the right home business, you can make more money and be at home with your kids!
Simply said, if you don't have a home based business of some sort, you lose out on all the tax breaks you've just read about. The cost to NOT have a home-based business is about $20 per workday or more. And that's every day, every week, and every year. That's a lot of YOUR hard earned money that's going to the Uncle Sam , that could be going into your own pocket!
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