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It is definitely never too early to think of tax time. As a matter of fact, NOW is a great time to be getting things together for the Jan-March tax crunch. It is also a great time to be thinking about ways to get ready and be organized for your taxes next year. Desiree Richardson has written a wonderfully informative article on the ways to maximize those deductions and take advantage of those benefits due to you as a work at home entrepreneur. Definitely worth a read!
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Tax Deduction Strategies For A Home Based Business
By Desiree Richardson
Congress has approved a number of tax breaks as incentives for small businesses. Owning a home-based business is the best way to take advantage of these tax breaks.
As a small business owner you have more tax breaks available to you than anyone else. Unfortunately, these tax breaks go unused because most small business owners don't know about them. Any home-based business, even part-time, that is not a hobby, and is in pursuit of a profit, can qualify for huge tax breaks - it's US Government law. You have a total of 3 years to turn a profit on your business before it will be considered a hobby and not longer eligible for a business tax deduction.
By owning a home-based business and taking advantage of the tax breaks available to you, you can keep more of your income, even if your business isn't producing a profit!
I am the sole proprietor of Rich and Rich Home Opportunities and also have an EIN (Tax ID #) for that business. I filed a business deduction for the business in 2009 even though I made about $600 total. Rich and Rich Home Opportunities is a company that focuses on bring quality home based business to the those seeking a home based business. I always pay for my advertising with my credit card or through paypal which is attached to my bank account, and makes it easy to create the receipts that need to be provided when you apply for your business tax deduction.
These are the tax deductions that I took in 2009 with all receipts!
If you have signage for you business on your car, this is considered advertising and the cost of gas and maintenance can be deducted. Keep the reciept when you purchase your signage and take pictures of your car and keep in your records.
Claim a home office deduction for your offices at home which I am sure has a fax,scanner,computer, record keeping, and educational materials that help you to run your business.
Your capital costs of a computer, it's software and even Internet access can be deductible when used is a home based business .
I payed via paypal for advertising on networks such as DirectSalesMoms, Traffic Exchanges, ineedhits, autoresponders, and offline print materials. My advertising was the bulk of my deductions.
I also deducted business start up costs because I would have to be a part of a business in order to promote it as a Rich and Rich Home Opportunities business. My company is classified as a b2b.
You don't need a company to tax a business deduction. If you are a network marketer or direct sales associate, then you are eligible for a business deduction. There is cap on the deductions based on the type of deductions. For example, I received $9,000 but that was my cap.
The key to all of the tax incentives and more is to treat your business as a business, not as a hobby. The intent of your business is to make a profit. This does not mean that you have to make a profit, but a reasonable effort has to be made. Work your business. Profit it what we all want! Keep good records of your business activities with a good log book and you will have no trouble with the intent. Working in a home based network marketing company has endless advantages with unlimited income, more free time to do the things that you want and helping other people.
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