Home Business Tax Information:
Tips and Strategies
The home business tax information on this website could literally save you thousands of dollars over the life of your business.
People who complain about taxes can be divided into two classes:
men and women.
The most important piece of home business tax information is this:
There are two tax deduction systems in America.
1) Individuals / Employees
2) Business Owners
Individuals or employees have VERY limited deductions they can make on their taxes. For most Americans, they PAY THEIR TAXES FIRST and then they are free to spend what’s left over. And when they get taxed, they are taxed at the highest rates possible. Additionally, IRA or 401(k) withdrawals for those in retirement are also taxed at the highest rates possible.
“The taxpayer - that's someone who works
for the federal government but doesn't have
to take the civil service examination.”
Business owners get to SPEND FIRST, and then pay taxes on what’s left over. Every dollar saved from an in home business tax deduction is an extra dollar that stays in your pocket or stays in your business.
Here are the limited items an individual or employee can deduct.
INDIVIDUAL / EMPLOYEE TAX DEDUCTION
- Mortgage Interest
- IRA Contributions
Here is what individuals and employees are missing out on:
IN HOME BUSINESS TAX DEDUCTION
- Your Home
By operating a legitimate business from your home, the portion of your home dedicated to the business (like your home office) is the same amount you can deduct from indirect housing expenses. Utility payments, rent or mortgage interest, insurance, repairs, maintenance, property taxes, security system costs, and cleaning services are ALL tax deductible. You can even use depreciation of your home as an in home business tax deduction.
- Business Travel
Want to go to Hawaii or Las Vegas and have the ENTIRE trip become tax deductible? As long as you spend more days of trip for business (like a seminar or conference), it qualifies as an in home business tax deduction. This includes airfare, lodging, auto rentals, tips, meals, gas, parking, tolls, refreshments, and entertainment. You can bring your family along as well, but their expenses won’t qualify as deductions.
- Hire Your Family
This is a great home based business tax strategy. There is a long-standing tradition of family business in America. You can pay your children wages for help with administrative functions of running the business. Additionally, their income is tax-free and can even be used for IRA contributions or other investments. When most young people are getting started “in the real world”, in their mid-20’s, your children could be much further down the road to financial stability or even financial freedom. You can also help them learn about finances, business management, and responsibility.
- Business / Home Office Supplies
Anything you buy for use in your home business is tax deductible. Office equipment like a: fax, printer, copier, answer machine, or even a laptop computer can be deductible. The same applies to other things like postage, sales and marketing materials, books, magazine subscriptions, or dues to professional organizations.
- Home Business Operating Costs
Other sources of an in home business tax deduction are the standard items required to operate a home business. The telephone bill, website hosting, advertising, marketing costs, vehicle mileage, and gas can all be deducted.
Many people struggle with the decision of taking a job or starting a home business. Once a home based business tax strategy is implemented, the comparison is no contest. A home business will provide 3.5 times more money for your family and take ONE FIFTH the time investment compared to working as an employee. But don’t just take our word for it.
Click here for a detailed illustration of how you can apply this home business tax information.
The key to taking advantages of a home based business tax strategy is organization and good record keeping. We have developed a very easy and methodical system that does exactly that with simple products that can be built on a shoestring budget.
“America is a land of taxation
that was founded to avoid taxation.”
-Laurence J. Peter
Unfortunately, high taxes are and always will be an issue. But, you can generate significantly more income for you and your family with a home based business tax strategy than you can from simply taking a job.
Request our FREE Home Business Success Pack to see how.
Click here to return to
Starting a Small Home Based Business:
Utilize this Home Business Tax Information
Short Disclaimer: You should consult with a certified public accountant (CPA) and accomplish your own detailed research (with the following resources) for planning and filing your taxes.
IRS Publication 17: Your Federal Income Tax for Individuals
IRS Publication 334: Tax Guide for Small Business
IRS Publication 463: Travel, Entertainment, Gift, and Car Expenses
IRS Publication 535: Business Expenses
IRS Publication 583, Starting a Business and Keeping Records
IRS Publication 587: Home Business Tax Information
Here are some additional on-line resources offered from the IRS for FREE:
The IRS Small Business Resource Guide
Tax Calendar for Small Businesses and Self-Employed
Home Business Tax Information: Tax Avoidance Schemes Brochure
Recognizing Illegal Tax Avoidance Schemes
All of the above resources and publications are available at the IRS website:
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