One of the best advantages of having a home based business is the tax advantages that you will get to enjoy, and not to mention the time freedom and becoming independently successful. The guidelines for the IRS allows you to deduct business expenses from the revenue you generate from your home based business, and any other income that you generate. You get to write off so many expenses and really capitalize on these great tax laws that owning a home based business offers.
If you were to have your own home based business you can write off the followings:
Office Expenses: Whatever you use for your business such as, pens, paper, postage and so many more expenses can be be claimed in full each year. Although you can claim larger office items such as filing cabinets, printers and computers, these fall under depreciable assets, so the rules are different. Even if you do not have an official office you can still claim these costs, even if you do most your work in bed on your laptop.
Mortgage or Rent and Property Tax: One of the greatest tax write offs for home based business is your home. If your home is your primary place of business or you use a certain space in your home just to earn income, than you can claim a portion of your mortgage interest and property taxes. This can really save you a lot of money, just by having your own home based business. And if you rent, and can prove that you are using your space of living to run your business you can write off portions of your rent as well.
Automobile: Tax write offs for home based business can also include your vehicle; this is another area where you can really save a lot of money. But you do need to keep track of your expenses and mileage used for business related activities, which can be anything from going to meetings, going to buy office supplies, going to meet with people and etc. You can also claim portion of your fuel,oil, maintenance, car insurance and licensing. If you lease, you can deduct the cost of the lease. However, there is a cap on the amount of interest you can deduct over the life time of the vehicle.
Other Home Expenses: You can deduct almost any expense that you incur from owning a home or renting as well. But the same rules apply only a portion can be deducted depending on how much it is used for business. These other expenses include power, internet, phone, heat and hot water, and any maintenance repairs.
Travel Expenses: While you cannot deduct vacations, but you can deduct expenses associated with your business. This includes plane fare, hotels, meals, rental cars, and any other expenses associated with traveling. The key is to make sure that more than half of the days on your trip qualify as business days. For example if your home based business has a seminar or convention that you attend. You can also bring your family as a vacation as well. And if you have more days at the seminar or convention than family days, you can write off the entire trip as a business trip.
These are just some of many tax write offs available to home based business owners, which truly gives you the opportunity to save a ton of money with these tax laws. And with the cost of living increasing everyday, now its the best time to really start thinking about a Plan B and not be dependent on just one source of income. And starting a home based business can really be a turn around in most families around the world, even if its just to lower your taxes.
Most traditional businesses do not become profitable for about 3 to 5 years. So in the beginning it’s a lot of expenses and not much profit. The IRS acknowledges the fact that most business will not be profitable in the beginning stages. So there for it allows the business to deduct all expenses from their revenue before the IRS considers on taxing you on it. And the same rules apply to a home based business. And the best part of it all, is that many items that the government consider as a legitimate expenses for your home based business are things that you are already paying for, but you cannot take advantage of any of it being a tax deduction unless you had a home based business, and I gave examples of some of the many tax write offs available to you, if you had a home based business.
While your expenses exceed the amount of revenue you are generating from your home based business, the tax deductions can be deducted from your regular W-2 income from your full-time job. So if you decide to start a home based business you will receive tremendous tax advantages, and also perhaps make a fortune for you and your family, and you will get to keep most of your hard earned money. Because there are 2 tax systems in the United States, and most people think that there is one for the rich and one for the poor, and that is not the case. There is one to make you rich and then there is one to make you poor. There is one for employees, thats designed to take your wealth and make you poor because employees are taxed on dollar1. And then there is a tax system for the self-employed individuals which is designed to create economic growth. And the reason for that is because small businesses generate over 70% of the job growth in North America so thats why congress passed out these great tax laws for small businesses.
If you would like to know how you can start your own home based business and start taking advantage of these great tax benefits go to http://www.getpaid2day.toolsrock.com
About the Author
My name is Rafael Rodriguez and I am a home based business owner and enjoying every minute of it. While enjoying all the tax benefits that come with having your own home based business. Although you do have to put in work into your business, but the beauty of it is that you are working for yourself and building your dreams not someone elses dreams. You get to work when you want, whenever you want, and anywhere you want, so by owning a home based business there are no limits to what you can actually make, the more you put in the more you get out. So i suggest you start taking action NOW by going to http://www.getpaid2day.toolsrock.com and create your success towards freedom and wealth.
Thanks Everyone
Rafael Rodriguez