Tax Strategies for Home-Based Businesses

Why start a home-based business

Although the primary reason for starting a home-based business is to make money, there are a number of other reasons for starting your own business including:

Freedom

You have the ability to make your own schedule and not live by a time clock or be subjected to working hours that are not conducive to your family life.

No bosses

You never have to answer to anyone but yourself so no bosses will be hounding you or threatening you with your job if you don’t perform to their expectations.

Mobility

You’re never chained to a desk or stuck in some cramped cubicle.

Earnings potential

You get out of your business what you put into it, so your earnings potential is only limited by you – not the whim of the company or employer that you are working for.

Just be aware of the fact that owning your own business involves a great deal of discipline, maturity, and responsibility. The freedom involved with creating your own work schedule could also be a double-edged sword if you aren’t careful.

IRS and tax considerations

Despite the above advantages of having your own home-based business, there are other important aspects that need to be taken into consideration, namely tax planning. Taxation is a completely different animal when you own your own business because unlike having an employer that makes the deductions for you, you are accountable and responsible for handling this issue on your own. If you want to minimize your annual tax bill, tax planning is critical and needs to be an ongoing event.

Understanding the tax write-offs involved with home-based businesses The biggest mistake that many new home-based business owners make is that they focus on whether to start up that business inside or outside of the home. What they should be focusing on is the tax advantages involved. Surprisingly there are tax advantages when owning a home-based business that you wouldn’t be able to enjoy in a different endeavor. Learning more about your allowable deductions and the numerous write-offs you can take advantage of is the key. Here are a few aspects to consider:

To take or not to take the home office deduction – of all the allowable deductions and other numerous write-offs, this is probably the biggest decision that you will need to make. Even tax accountants debate over whether or not this is a smart idea. This deduction covers both the depreciation and the operating costs associated with maintaining your home office. The percentage of your home’s square footage that is dedicated to your office is normally deductible.

Maximizing the deductibility of your expenses – there are numerous legitimate expenses that may be considered for deduction over and above the ones mentioned in the prior paragraph. Home-based business overhead typically includes a variety of expenses such as advertising expenses, travel expenses, office supplies, equipment depreciation, etc. Chances are, you’re going to be surprised when you realized how many of your daily expenses are actually tax deductible.

Plan your errands with your taxes in mind – the first mile that you travel away from home is deductible so you want to incorporate a component of your home-based business into every trip you make away from home, even if you are running personal errands. For instance, if you have a PO Box set up for your business mailings, make sure that you fit in as many business cold calls as possible when travelling from your home to the post office and back.

Remember, the key to allowable home-based business deductions as well as any brick & mortar business deductions is thorough record keeping. I recommend consulting with your accountant.

Start Your Own Business – 5 Positive Signs That Will Determine If a Business is Right For You

Starting any type of business is a serious undertaking. You want to make sure that any business that you start is the right one for you. However, the question is, ‘How do you know that a certain business is right for you?’ The best way to find out is to determine how it makes you feel. If a certain business makes you feel like you’re back in high school and you can’t get a date for the senior prom, then that business is not for you. On the other hand, if it makes you feel like dancing the night away (and the morning and afternoon, too), then not only is it a good fit, but may also be a lifesaver. However, there are also other factors to consider when deciding whether or not a business is the right one for you, and you must examine them very closely before choosing either way.

You’re an Expert
You know the business inside and out. In fact, you know it so well that if you were to appear on “Jeopardy” (the TV game show) as a contestant with your business expertise as the only category, you would not only be the big winner, but would also amaze the millions of TV viewers watching the program. As an expert, you are highly confident in your knowledge of the business, and therefore would be a big handful for your competitors.

It’s a Labor of Love
It’s something that you absolutely love, and could do all day long. You would love the business so much that you’d almost end up having a strange extra-marital affair with it. You would do the business every single minute of the day, if sleep wasn’t such an important health issue. Also, you would almost forget that it’s lunchtime, and persist in your work as the clock ticks pass the noon lunch hour. You would be love sick if you were away on vacation, and the business couldn’t go with you. You would talk about it, and drive others crazy as a result. It would be the love of your life; next to your spouse and children, of course.

You are the Best Salesperson for Your Products and Services
You could sell the products and services with ease. Your unique selling proposition would make you highly competitive in the marketplace, and potential customers would see you as the authority. In turn, they would know that they could trust you., and would therefore do business with you. You would neither need nor want to be pushy. However, you would be affectionately persuasive when it came to helping your customers, because you know the benefits of your products and services.

You Can Afford It
Whether you personally had the cash to purchase the business or not, you would get the startup funds through creative financing and clever negotiation. You would then tap into your labor of love for the business, and make it very profitable. This would ultimately ensure that you could afford it in the near future. The business would remain in the “black” throughout your period of ownership, because of your wise economic strategies in connection with expenditures, profits, losses, and investments. You would take care of it well enough for it to regularly increase its annual profit margin.

It Needs You
The business couldn’t do without you. It’s very survival would depend on your leadership and decision-making. In your presence, the business would operate smoothly. However, out of your presence, it would not do as well, because you know it better than those left to manage it. It could only exist, because you make smart decisions to ensure both its survival and growth. No one could run the business the way you could, and it wouldn’t want anyone at the helm but you anyway. It would allow you to spend how you saw fit, because you would do so sensibly. It needs you as its leader, ruler, and chief.

Online Network Marketing – Home Business For Baby Boomers

The time is right for baby boomers to embrace their new home business. The baby boomers have been a major force to be reckoned with ever since the first one was born in 1946 and until the last one came along in 1964. If you were born during this time period, then you are a baby boomer. There are about 80 million of us and we represent about one third of the U.S. population. It’s estimated that we control 65% of the money.

If you were in the right industry (or picked the right stock) as the wave of boomers grew, then you could have enjoyed a ripe harvest. While the first wave may be retiring, the rest of us need to make sure that we are positioned correctly to enjoy our turn when the time comes.

Year of the Entrepreneur

Entrepreneur magazine says that 2010 is the year of the entrepreneur. And I want to challenge you to claim your spot as a new home business owner. Are you ready to stretch and grow into a business model that’s a perfect fit? We have tons of experience and a lot to offer. Have you ever thought about starting your own business? If you genuinely want to help people, a home based business works well because you can start it part-time with less than $1,000.

What would it be like being the boss? Would you work harder for yourself than you have for your employer? Are you ready to start building the life you see when you close your eyes and dream? We were taught to go to school, get a good job, work hard, and then retire to do the things we always wanted to do. How is that working out for you? The old way is broken and doesn’t work anymore. Putting your future in your boss’ hands just doesn’t make sense – emotionally or financially.

Four Keys to the Right Business

But how do you decide to start a business? What should you consider before you begin your new enterprise? Let me give you four essential keys to help put the odds in your favor. There’s nothing fancy or mysterious about them. They are just common sense.

1. The first key is to look for a market that is growing. Being part of the baby boom generation, you’ve had a huge impact on markets throughout your life. Ask yourself, ‘What is important in your life, right now?’ What kinds of products and services will you be looking for and buying over the next ten to fifteen years?
2. The second key is to look for something that is purchased over and over again. If you market a product or service that is used rarely or doesn’t run out, then your next paycheck will depend on finding a new customer. If you offer a widget that gets used up on a regular basis, you will build up a steady clientele that will buy from you on a consistent basis. Which would you rather have?
3. The third key is finding a product that cannot be purchased just anywhere. Most commonly available products are purchased on either convenience or price. People will pay more for something if it’s something they need right away and they don’t want to run all over town to get it (e.g., convenience stores). If price is important to them, then they will buy what they need at the lowest cost (e.g., Walmart). You want to make sure that you are not competing on either of these levels.
4. The fourth key is to find a business model that allows you to leverage the efforts of other people. There are only so many hours in each day. If you are the sole worker in your business, then your business will grow only as fast as eight hours each day will allow. However, if you train others to build their business inside of yours, then you will benefit from the efforts of others in addition to your own.

Carpe Diem

The time is now. It’s important to understand the four keys to choosing the right business in order to set yourself up for success. Decide today that this will be your year. Isn’t it time for you and your family to win? Seize the day and create long lasting prosperity in your home business today.

Home-Based Business Opportunity For Professionals

If you are a professional who works for a company but wants to have your own business, then you may start by building an office right at your home.

Having an office at your own home to start up your business is a practical way to jump on your dream of having your own venture. This saves you from costly rent and fixtures and other expenditures if you put up your business inside a building or in other office blocks.

It is a home-based business opportunity that is advantageous in many ways, and one of them is not running out of customers. It is because your own neighbourhood consists of different types of people and it is very likely that quite a few of them need your service.

If, for example, you are an IT specialist, every house in your neighbourhood owns at least one computer. You may offer troubleshooting for any sort of computer technical problems. You may also offer computer tutorials. You can offer data programs if you know anyone from your neighbourhood that has a business, too, like an accounting system program so as to ease their tasks in managing their accounting records.

If you are a fashion designer, you can also have your own office at home and you can offer your service around your neighbourhood, especially if there are occasions like weddings, special birthday parties and other events. You may turn a certain space of your home into a fashion gallery where you can put mannequins that will showcase your designs. You can also offer costume rents for all sorts of occasions.

If you are an art painter, you may also occupy a space at your own house where you can display your art gallery. You may also provide an art digest to interested customers who do not have the time to visit your art gallery at home and have the painting be delivered to them instead.

If you are a CPA or a lawyer, you may also have your own office at home if you want to go freelance or if you want to have an extra stream of income.

You can turn your professional expertise into something that can be a home-based business opportunity. If you want to have your own business, you may always start at your own home if you do not have a big budget yet. Even professionals nowadays are looking for a home-based business opportunity to create another stream of income prospect, and you can have your own, too.