Why Starting A Home-Based Business Pays Off!
Please make sure you educate yourself about home office deductions. Simply by owning your own business, you get wonderful home office deductions.
Why You Should Have a Home Business
"It is anticipated that by the year 2005, 50% of households in the US alone will be involved in a home business" - Newsweek Magazine
As you can see, home based business's are gaining in popularity in America. This is especially true now because the IRS has recently re-instituted the home business tax deduction which allows home business owners to take substantial deductions every year in business expenses. This means that you can start a home business and not make a dime with it and still be able to come away with extra money in your pocket at the end of year!
"A home based business is the best tax shelter left in America" - Sandy Botkin (IRS Attorney & Tax Reduction Institute Chairman)
This is a very serious and important part of your home based AmeriPlan Business. I talked with Lynn and last year she had $14,000 taken out of her JOB check throughout the year. By using her home business allowable tax deductions she got a Tax REFUND of over $11,000 that she would not have gotten without her home business deductions. Michael in Dallas told me that with he and his wife's income last year before applying the AmeriPlan home business deductions they owed an additional $6,000. AFTER the home business deductions were taken, they received a $5,000 REFUND.
Marvin D. Krueger, CPA, CMA : listed over 50 ways you can document and deduct business expenses from your U.S. Income Taxes, and added 8 overlooked areas.
The IRS requires written documentation to qualify for the deductions. NOW is the time to start keeping your receipts!
Where applicable, here is his list of potential deductions for your business:
* Your Marketing tools . In order to understand and market AmeriPlan, you need to use the company brochures and promotional material as well as the training material, quick start paks etc.. [AmeriPlan provides receipts for all purchases, keep for tax time.)
* Your Membership Fees. The monthly website charges etc. are deductible business expenses. Since many of the benefits from using AmeriPlan come in the short and long-term, we must become a "product of our product", and by using the plan allows us to have our own testimonies and increases our belief and confidence in the value we offer our members.
* Your Home Office. Create one area in your house to do your AmeriPlan Business from. It can be out of a closet, a desk in the corner of a room, a full room, or an office created out of some of your garage space, the only requirement is that it be used exclusively for business. If your desk is in the TV room, you can't deduct the whole room, just the area that you actually work in. The percentage of the house used for business calculates the part of the following that you can deduct from your taxes: (Document with receipts.)
* Rent (If you own your home with the bank, the interest, taxes, etc. are applied elsewhere)
* Electrical Bill
* Other Utilities
* Insurance (not deductible at all, unless you have a home business!)
* Cleaning Service (as long as they clean where you office is too!)
* Garbage service
* House Repairs
* Landscaping (if people come to your house for business related activities)
* Personal Training Expenses. (Document with receipts)
* Seminars Attended
* Cassette / CD programs
* Series tapes/CDs
* Training Conference calls
* Advertising Expenses.
* Like AmeriPlan Gear? It all has the logo, and is thus an advertising expense.
* Giving a gift? If AmeriPlan product, or AmeriPlan Gear, treat as Advertising.
* Newspaper ads
* County Fair / expo booth fees.
* Product Samples
* Company Literature
* Reproduction costs (photocopies, etc.)
* Labor Expenses paid to your children for Business related work. Keep track of what is done, and how much paid, pay by check, canceled check is proof. NO SSN OR INCOME TAXES need to be paid on your children!
* Emptying the Garbage
* Mowing Lawn, other Landscaping
* Cleaning your office.
* Computer work (Most kids are better at computers than we are!)
* Envelope stuffing/postcard stamping, other mailing tasks.
* Other business related items.
* Business Travel.
* Convention Travel to pre-arranged presentations.
* Put an ad in their local paper two-three weeks before, coordinate several appointments, and your trip is deductible (within some limits). Is your spouse going? Are they working with you in the business, and will they be at the appointments? Their trip is deductible too!
* Air fare, train fare, and car mileage.
* All "fees" related to travel parking, tolls, security, etc.
* Meals while on the trip (subject to limitations).
* Entertainment expenses (subject to some rules and limitations)
* Out of area training.
* Office Expenses. Paper clips, printer paper and toner, light bulbs, pens, pencils, highlighters. White boards, easels, presentation flip charts. Furnishings (Chairs, desks, lamps, carpet, etc.) Equipment (Computers, printers, fax machines, PDAs, phones, etc.)
* Phone bill (If you only have one phone, only the long distance calls related to business, the IRS believes that one line is a necessity and will not allow that as a deduction).
* Special services on your phone bill (Three-way calling, call waiting, voice mail)
* Second line used for business. (Document business usage by adding to your business card/stationery)
* Cell Phone. (Document business usage by adding to your business card/stationery)
* ISP account and e-mail. (Document business usage by adding to your business card/stationery). (Document fees by printing billing)
* Data processing costs for business report.
* Postage for business mailings.
* Business Meals. When you do a presentation at a restaurant/coffee shop, pick up your receipt! This is a deductible expense (50%)
* Celebration Expenses. Giving a party to celebrate? Make it a business event. Invite your business associates/prospects and deduct the entire cost! (Make sure you celebrate your business!) Document via receipts and invitation list, have attendees sign a "guest book" to document who attended.
* In-home expenses. Baby Sitters Product cases (for carrying display product in/out of house) Demonstration supplies. Assistants (read: your children, if old enough) Food provided (100%). Snacks/Tea/Coffee/Attain Shakes (100%)
* Mileage to/from presentations, training events, Product Launches, etc. Document with mileage log. Do for three consecutive months, or three like periods, extrapolate totals to full year (multiply by four). IRS requires some sort of logical, written documentation of this. If your day planner does not have a good sheet for this, check out on the web for one, or make your own. It needs Date, purpose, start mileage, end mileage, total mileage on the trip, and total mileage for the month. You will also need the year's start and ending mileage numbers off of your car's odometer for the tax form.
Staying at a Friend's house while on business? Give them a gift in return, and deduct the amount as lodging for the trip. Cash or product are both OK (of course, give a gift of AmeriPlan, especially if they are not yet customers, it breeds interest!) Limitation: Cannot exceed the cost of average hotel room in the area. (You can get the government's idea of "average" for an area by searching for the US Government "per diem" rates on the Internet).
Taxes are a VERY complex issue, & no widespread communication like this would be complete without the "boiler plate" disclaimer:
All of the above information is advisory and educational. It MAY NOT apply to you and your circumstances in any given year. If you have any questions about your specific situation, consult a qualified Tax Professional.
If you have your taxes "done" each year by a professional, the time spent organizing your paperwork for a computer tax program will:
- Reduce your fees, because the accountant will save time by not having to organize them for you.
- Raise your knowledge level so you can give your accountant all he/she needs to qualify you for ALL the deductions you deserve.
- Allow you to better evaluate your accountant's services, as they relate to your situation.
- Improve your filing system to reduce your time and fees even more for next year!
Congress GIVES us these deductions to ENCOURAGE small businesses!
Please use all the deductions you are qualified to receive!
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