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Are YOU Gettin' ALL Of Your 2007 Tax Deductions? Here's How...
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By the time you read this week's edition of The Home Business Insider we'll be just about 30 days out from year end 2007. Where on earth did the year go?
So no better time than now to make sure YOU as a Home Business Owner and Entrepreneur are getting ALL of your ALL important 2007 tax deductions. You may surprised at how much you are entitled to…
In any Home Business you definitely have far more tax advantages than if you are a W-2 (salaried) employee. But who the heck would want to be one of those, right? ;)
The tax advantages become substantial when you consider how you can improve the profitability of your Home Business by declaring ALL of the deductions you are entitled to. And there are many…
This is one of the main benefits of working for yourself. However, you may be missing some very important deductions though so lets dive in…
You must itemize your deductions for your Home Business operation just as you would for your personal deductions. Knowing which deductions you are entitled to can save your Home Business thousands of dollars a year. Yes, thousands.
This reason alone is why the Home Business industry is now a larger force than the pharmaceutical industry, food industry and consumer goods industry...Combined!
Here is some background information on how your income tax amount is arrived at by the IRS. Don't get too caught up with understanding exactly what this means. I know I don't. It's your accountant's job to understand this, not yours. More on that in a moment.
The U.S. taxation code states that almost all income is subject to Federal income tax. The way that number is obtained is as follows:
Gross Income - (All Expenses + Miscellaneous Deductions + Depreciation on Assets) = Taxable Income.
Taxable Income X (Your Tax Rate) = Income tax for the fiscal year.
Here is a quick definition of the terms in the above taxation equation:
Gross Income = The total of all income for the year.
Expenses = All costs of doing business during the fiscal tax year. Examples include advertising, payroll, materials, supplies and interest on business loans, etc. To find out if an expense qualifies as a legitimate business expense, consult your accountant or the IRS.
Depreciation = This is the way of spreading out the deductibility of an asset over a period of more than one year.
If you're a Home Business Owner and Entrepreneur in any way shape or form and you do not have an accountant…GET ONE. This is not something you want to do yourself and if you are, you're making a BIG mistake. This is an area that requires schooling, licensing and expertise.
Its one thing if you are a W-2 (salaried) employee. That’s an easy, cut and dry tax return you can do with software.
As a self-employed Business Owner it’s a whole different ball game and must be handled by a pro, a licensed advisor in this area.
Do you think someone like Donald Trump or Warren Buffett would do their own taxes? Come on now!
Miscellaneous Deductions:
This is an often misunderstood and overlooked way to save a lot of money on taxes. Remember that these types of expenses must be totaled up and separated from your personal expenses. This is one of the key reasons you should have a corporation set up for your Home Business, so that everything is separated.
In a recent issue of my newsletter a few months ago, I wrote about the importance of setting up a corporation for your Home Business.
You can read it right here...
www.TheHomeBusinessInsider.com/archive3.html
Below are all the KEY deductions and write offs YOU are now entitled to as a Home Business Owner and Entrepreneur that you are NOT entitled to as a W-2 (salaried) employee.
This may shock you and may very well make you want to go out and start a Home Business if you don't have one already. Not a bad idea for 2008. The tax laws have never, ever been more favorable for you than they are right now…
Business related expenses include:
1. Air fares
2. Auto expenses
3. Books and Magazines
4. Educational Expenses
5. Home Office Space + a portion of utilities, telephone, and
maintenance costs
6. Office Furniture
7. Cleaning Expenses
8. Meals with Business Clients
9. Laundry Expenses (When Traveling)
10. Advertising
11. Impairment-related Expenses
12. Licenses and Regulatory Fees
Not bad, huh?
All those things we buy day in and day out are now of HUGE benefit to you as a Home Business Owner and Entrepreneur. But if you're not one, it is of NO advantage to you. Sorry…
Always track your expenses and be sure to save at least one copy of every deduction. You will be asked for proof of every transaction that is declared as a deduction if you are audited by the IRS.
Its a good idea to devote a credit card to your business only so that ALL of these items are itemized for you each month. Saving paper receipts is a thing of the past.
Did you know your chances of becoming audited as a Home Business Owner with a corporation are about 20% less as opposed to being a Home Business Owner without one? Check out the recent newletter I wrote on this subject at the link above.
As you can see there are many deductions that are allowable for your Home Business. The best way to get more information on tax deductions and related information on income taxes is to go online to:
http://www.irs.gov
There you will find a helpful search engine containing thousands of government publications that you can research and print out if you need to. But again, you shouldn’t need to worry about any of this if you work with a qualifed accountant. I just want to make you aware of it...
Now you have a good idea of the deductions you are entitled to and they are significant. So do your research, keep track of your expenses, and take ALL of the deductions you can for maximum profit in 2007.
Not the most exciting topic, I know, but one of the most important as we near year end.
Take action! See you next week…
Your partner on the inside,
Andrew J. Cass
Home Business Development Expert
(212) 969-9930
www.TheHomeBusinessInsider.com
About Andrew J. Cass:
Andrew J. Cass is a Home Business Development Expert, Marketing Consultant and Certified Dan Kennedy No B.S. Business Advisor. He is in the top 1% of income earners in the Direct Marketing and Home Business industry.
Andrew coaches and mentors Home Business Owners and Entrepreneurs from all over North America who want to be their own boss, control their own destiny and earn unlimited income from home.
www.AndrewJCass.com
Copyright 2007 - One LifeStyle Marketing, LLC
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