Now that you have a home-based business, it's time to take advantage
of the TREMENDOUS tax advantages available to you! Nobody likes tax
time, but owning a home-based business can literally save you
thousands of dollars a year in taxes by allowing you to turn
personal expenses into legitimate, allowable business deductions.
The more tax deductions your business can legitimately take, the
lower 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, you would only pay taxes of
your net income of $85,000. At 30% tax rate, that could save you
$4,500 in federal taxes!
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We recommend you talk to an accountant about allowable tax
deductions, but here's some tax strategies to keep in mind:
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Shaklee
The cost of at least the first 100 PV is 100% deductible, also
the price of the kit, whether it's the $299 or the $19.95. A lot
of people also write off the first time they buy anything because
it's a demo. Others write off everything they buy personally
because it's a vital part of their business.
Auto Expenses
You can either keep track of and deduct all your actual business-
related expenses, or simply deduct 50.5 cents per mile from Jan. 1,
2008, to June 30, 2008, (up 2 cents from 2007). The rate is 58.5
cents for each mile driven during the rest of 2008. Keep track of
mileage & how the vehicle is used.
Education/Training Expenses
Costs of training meetings, training programs and manuals, books,
online training subscriptions, etc.
Also deduct Legal and Professional Fees, (Fees you pay lawyers,
tax professionals or consultants).
Business Entertaining
You may deduct 50% of the cost for entertaining 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 takes place immediately before or
after a business discussion. (Keep notes of the people involved
and the business purpose.)
Travel
When you travel for business, you can deduct many expenses,
including the cost of plane fare, costs of operating your car,
rental cars, taxis, lodging, meals, shipping business materials,
dry cleaning, telephone calls, faxes and tips. It's OK to combine
business and pleasure as long as business is the primary purpose
of the trip. If you take your family along, you can deduct only
your expenses, just as if you had traveled alone.
Interest and carrying charges on credit cards and business loans
are fully tax-deductible.
Computers and Software
You can now write off a whole computer system in the year that
it was purchased if the total cost is less than $25,000, and if
it is used exclusively for business purposes. (IRC Sec. 179) In
most instances, software bought for business use must be
depreciated over a 36-month period, unless you can demonstrate
that it has a useful life of less than one year.
Charitable Contributions are deductible
Rules vary depending on whether you are an LLC, partnership,
S corporation, or regular (C) corporation, the corporation can
deduct the charitable contributions.
Advertising
All expenses involved in advertising or promoting your business
are deductible, i.e. business cards, classified ads, yellow pages,
brochures and flyers, etc. Also includes signs for home or car,
event signage, extra websites, etc.
Household Expenses
This can be one of your most valuable deductions. To qualify, a
percentage of your home must be used "exclusively and on a regular
basis" for your business. (It doesn't have to be an entire room.)
Hints: Have your address on your business cards and stationery, have
a photo of you in your office, holding a newspaper to validate the
date, and keep a log of what you're doing in your office.
Often Overlooked Expenses:
Business expenses related to your health & wellness business, like
the make up kit, Air source, any team or church donations in your
business name. Products you buy to let others sample, or share at
social or business events with your business advertised.
If you own your home, you can depreciate a percentage of all
acquisition costs of your house and home improvements over a period
of 39 years. You can depreciate 100% of expenditures and improvement
costs to your office space.
A percent of all household expenses, including property taxes,
mortgage interest, homeowner's insurance, utilities, property
maintenance, alarm systems, snow removal, grass cutting, etc.
Office furniture and equipment - Have you bought any desks, chairs,
computers, files, lamps...Up to $20,000 in business furniture and
equipment can be deducted in one year.
Homeowner's insurance, utilities and related expenses based on the
percentage of their use in the home office.
Household maintenance - Repairs to your home office are fully
deductible. Repairs to the whole house would be deducted on a
percentage basis.
Snow removal and lawn maintenance, even a percentage of your
landscaping.
Don't Miss These Miscellaneous Deductible Items:
Sales aids, i.e. audio and videotapes, CDs, DVDs, books, etc.
related to your business.
Bank service charges - you can avoid these by getting a free
checking account. 100 % deductions for hiring children or grand
children - pay them up to $4500 per year. (They pay less %)
Business gifts - up to $25 purchased for customer or distributor -
even if they're related to you.
Business-related magazines and books
Casual labor and tips
Casualty and theft losses
Coffee and beverage service
Office supplies - paper, toner, clips, tape, staples, etc.
Online computer services related to business - lead generation,
IR HomeSites, etc.
Parking and meters
Photocopies - handouts, flyers, training materials, etc.
Postage - stamps or shipping on anything sent to partner or
customer or prospect
Stationery - cards - even holiday cards to above
Seminars and trade show fees - monthly team dues, meeting charges
or tickets for all events
Taxi, train, shuttle and bus fare
Telephone calls and phone cards when away from the business
We've been told a dog is a security system for your business - therefore deductible
NOTE: If there's a possibility you may sell your house, talk to
your accountant about the tax ramifications. "Unless 100% of your
home qualifies as a principal residence for at least two of the
five years preceding the sale, you'll have to pay capital gains
tax on the business portion of your home."
For more info: http://www.irs.gov/newsroom/article/0,,id=202106,00.html
All The Best,
PS. All of the above also applies to Canadians!
Malendaz Coleman is an independent distributor representing different product lines from different companies. I am primarily a real estate investor / independent distributor for Shaklee products proudly featuring their line of earth-friendly, non-toxic, super-powerful, highly concentrated cleaning products that perform equal to or better than almost everything on the market. Stain removers, scouring paste, kitchen cleaner, floor cleaner, window cleaner, also in convenient cleaning wipes.
More product related information at http://www.123GreenLife.com
Shaklee has a proud heritage of manufacturing and marketing healthy, non-toxic, natural products -- standing on a more than 50-year history of creating products "in Harmony with Nature." We do business by the "Golden Rule" and guarantee the absolute purity of our ingredients. No ifs, ands, or buts. Just for example, new botanical ingredients go through extensive third-party testing for purity, including testing for 358 potential contaminants. Need help Call Me Direct (941) 628-3891 0r Email Me malendazcoleman@yahoo.com
