10 Reasons To Start A Home Business
1: Tax Advantages Business Deductions. To qualify as businessdeductions, expenses must be reasonable and necessary. Taxpayersare required to keep accurate books and records. The recordsshould be complete enough to include types and sources ofincome, gains, losses, costs, expenses, and substantiation fortax deductions. Your records should include items such as bankstatements, cancelled checks, receipts or invoices, credit cardstatements, diaries and logs. Here are some example...
...s of what youcould deduct. Remember...also check with a professional first.Tax Deductions for Home-Based Businesses Nobody likes tax time,but owning a home-based business can literally save youthousands of dollars a year in taxes by allowing you to turnpersonal expenses into legitimate, allowable deductions. The more tax deductions your business can legitimately take, thelower its taxable profit will be. For example, if you earn$100,000 per year from your job and home-based business,combined, but have $15,000 in allowable business deductions fromyour business, you would only pay taxes of your net income of$85,000. At 30% tax rate, that could save you $4,500 in federaltaxes!We recommend you talk to your accountant about allowable taxdeductions, but here are some tax strategies to keep in mind:Auto Expenses You can keep track of and deduct all your actualbusiness-related expenses. Again, make sure you get the exactinformation that applies to your circumstances.Education/Training Expenses Costs of training meetings, trainingprograms and manuals, books, online training subscriptions, etc.Legal and Professional Fees, Fees you pay lawyers, taxprofessionals or consultantsBusiness Entertaining You may deduct a certain % of the cost forentertaining existing or prospective customers, if it is either"directly related" to the business, and business is discussed,or "associated with" the business, and the entertainment takesplace immediately before or after a business discussion. (Keepnotes of the people involved and the business purpose.)Travel When you travel for business, you can deduct manyexpenses, including the cost of plane fare, costs of operatingyour car, rental cars, taxis, lodging, meals, shipping businessmaterials, dry cleaning, telephone calls, faxes and tips. It'sOK to combine business and pleasure as long as business is theprimary purpose of the trip. But if you take your family along,you can deduct only your expenses, just as if you had traveledalone.Interest Interest and carrying charges on credit cards andbusiness loans are fully tax-deductible. Computers and Software Check with your accountant about therules that apply to your business.Charitable Contributions are deductible Rules vary depending onhow your business is registered. Get the details that apply toyour business.Advertising All expenses involved in advertising or promotingyour business are deductible, i.e. business cards, classifiedads, yellow pages, brochures and flyers, etc. Household Expenses This can be one of your most valuabledeductions. To qualify, a percentage of your home must be used"exclusively and on a regular basis" for your business. Often Overlooked Expenses Business related long distance services. Improvement costs toyour office space. A percentage of all household expenses,including property taxes, mortgage interest, homeowner'sinsurance, utilities, property maintenance, alarm systems, snowremoval, grass cutting, etc. Office furniture and equipment -Have you purchased any desks, chairs, computers, files,lamps...Up to a certain amount can be deducted in one year.Homeowner's insurance, utilities and related expenses based onthe percentage of their use in the home office. Householdmaintenance - would be deducted on a percentage basis. Snowremoval and lawn maintenance. NOTE: If there is any possibilityyou will sell your house within the next several years, talk toyour accountant about the tax ramifications. Note: This list of business expenses is not inclusive. If theitem you're thinking of using as a business tax deduction isn'ton this list, that doesn't mean it's not a legitimate businessexpense. Check with your accountant Business Expenses *Accounting & Legal fees (related to business activities) *Advertising expenses * Automobile expenses * Bad Debts * BankCharges * Business Taxes & Business Licenses * Collection Agencyfees * Conference and Convention fees * Expert Advice(consultant fees, for instance) * Interest expenses (on moneyborrowed to run your business) * Insurance expenses (forbuildings, machinery or equipment) * ISP fees (business use) *Membership Dues (for business-related organizations) * Meals andEntertainment expenses * Office Rent expenses * Office Suppliesexpenses * Postage & Courier expenses * Private Health ServicePlan (PHSP) premiums * Promotion expenses * Property Taxes *Repair & Maintenance expenses * Salaries of employees -including salaries of family members *Telephone/Telecommunications expenses * Travel expenses *Utilities More Reasons for working from home.2: Personal Freedom to come and go as you please. Did you everwant to just spend a day with your family? Did you ever want toattend a special funeral but you had to work? What aboutvisiting someone in the hospital? Can you just take a few hoursoff in the day? This is one of the best reasons for having ahome business...you are able to manage your own time. This doesnot mean working less; rather it means flexibility of timescheduling. 3: You get to keep the profit. All of it. This needsno explanation. If you work hard, if you are committed to yourbusiness, you will reap the benefits...and you will also get tokeep the profit. 4: No Boss. The stress of working for an unfairand egotistical boss can be tremendous. It has even beensuggested that this kind of stress can lead to heart disease.Work related stress has been the cause of marriage break ups.Some people just cannot come home at night and leave their workrelated issues AT the office. They bring their concerns, fearsand frustrations home with them...and the whole family suffersunder this strain. I had a wonderful boss for 25 years. Thatchanged. I work from home now. 5: No stress about co-workers.Numerous studies show that office stress is associated withsusceptibility to illness such as cold and flu including carpaltunnel syndrome. You spend 8 - 10 hours at work. If you do notget along with your co-workers, if there is a lot of officepolitics these hours 8 hours can seem an eternity. Officepolitics and employee dissention can eat away at the inner coreof your being. 6: You get to raise your own children. Bychoosing to work at home, you can choose your own business hoursand personal hours to fit your needs. Many successful homebusiness entrepreneurs will also hire nannies to look aftertheir little ones while working in their home office. They lovebeing there for their children and can still devote thenecessary hours to their work. 7: You get to be creative. No onecan limit your talents. You can outsource what you are not goodat doing. Instead, you can concentrate on what you are good atdoing. 8: No rush hour traffic or concerns about driving in badweather. Working at home means you wake up and look out thewindow; you either smile or frown at what you see and go getyourself a cup of coffee. You watch the news; you watch thetraffic problems, and then you go to work, at home.If you have kids at the daycare, you know all too well thestress of getting there on time to pick them up after a long dayat work. Daycare workers may love to look after your littletreasures in the daytime...but, come a certain time in theevening, and they want your little ones gone. Many daycareworkers charge a big fee for overtime, and rightfully so, butmany also get very upset when the children are picked up late. 9: Not being tied down by someone else's demands. Do you haveto work when asked to do overtime? Are you worried about losingyour job if you do not comply? Do you feel pressured to work onyour days off? Do you make plans to be with your family only tohave your boss veto your plans? Working at home means you areable to schedule your own time. 10: Most important...You choosewith who you work. You choose how you work. Always remember,working at home does NOT mean working less. One very special reason... especially this time of year, tostart a home based business is TAX ADVANTAGES! Keep your hardearned dollars out of Uncle Sam's pocket
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