Included here are a number of ways for Home Based Business
Owners to save money on their taxes.
1. Keep your business home based: Not only will you be at your
work place (home) but it will give you opportunity to use your
home as your place of business and you will be able to deduct
part of it on your taxes. Also, when you work at home you can
arrange your hours to suit you.
2. Divide your income: You can pay reasonable wages to your
spouse and children. In doing this you can legally divert
income taxed at your higher rate to your family members that
are in a lower tax bracket. It not only make sense but it also
makes dollars for you.
3. Incorporate Your Business: One of the best things that you
can do as a business person is to incorporate yourself. One
of the many thing that incorporation will do for you is it will
limit your liability. You cannot be sued beyond the worth of
your business and you may enjoy lower tax rates on small
business income and be able to take other tax advantages as
well. Just take it from someone who has been through it,
Incorporation is smart for your business and you.
4. Keep a close account of your expenses: If you are a
beginner or a pro, in a homes based business, make certain
that you document your expenses. Keep good records, because
if you are audited by the IRS you will have to have
substantiate of all your expenses. Be sure that you keep a
mileage log so that you can prove the percentage of business
use you claim for your vehicle? If you have not done so,
begin now and keep all receipts for all your entertainment
expenses and list the business purpose on the back of each
receipt. These are some of the things that if you learn to
do consistently will save you a lot of money and grief later.
5. Rearrange Your Affairs For Maximum Tax Savings: These are
some questions that you need to ask yourself. Can I make some
changes to turn my hobby into a moneymaking business? Is it
possible to use that extra room in my house as a home office
for my business? Can I arrange to use my car more for business
purposes? Can I arrange for more of my entertainment expenses
to be business related? I’m sure that the answer to these
questions is yes. Talk to an CPA that you trust and they will
be able to help you save money and have some fun doing it.
6. Set yourself up on a calendar: It is important that you set
yourself up with a calendar and be certain that you file all
returns and pay all taxes due (income, payroll, sales, et cetera)
on time. You are going to have to pay them anyway, so you can
avoid expensive late filing (and payment) penalties and
interest. That’s why you need to make yourself a calendar and
insert the dates to take care of all these necessary thing.
You’ll be glad you did.
7. Develop a Tax Planning Mindset: Some people only worry
about their taxes during tax season. However, you will save
a fortune in taxes, legally, if you make tax planning your
year-round concern. Do you make business and personal
purchases, investments, and other expenditures with tax
savings in mind? You can and should be doing those things
to help you keep more of your money
About the author:
Donnie De Loney is editor and publisher of HomBzTips a simple
step-by-step plan for earning a dependable residual income each
month. He is also author of numerous home business articles. If
you are interested in starting an internet business visit: http://www.dymarketing.com/pips.html
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