As a CPA, serving primarily small business clients, the most common question I am asked is, "What can I deduct?" and I think, "Where do I start?"
First, get a FREE copy of my Small Business Deduction Checklist by visiting www.MyTaxTutor.com.
In order for your business expenses to be deductible, they must fall within certain guidelines; guidelines that can, at times, be somewhat vague. First and foremost, the expenses must be incurred due to your trade, business or profession. Personal expenses are generally not deductible except for a very few specifically allowed by Congress such as home mortgage interest and property taxes.
To qualify as a "trade", "business" or "profession" your activities must be carried out regularly and with an honest attempt to make a profit. Carried on regularly does not mean every day, but on a regular basis. You may have a roadside vegetable stand that is only open 4 months out of the year, but it is open every year, so it is carried on regularly.
And an honest attempt to make a profit does not mean that you have to make a profit for your expenses to be deductible, you just have to working towards making a profit. Basically, what the IRS is saying here is that you have to be running your business as a business in order for the expenses to qualify for deduction.
Secondly, your business expenses must be ordinary, necessary and reasonable. Ordinary expenses are those that are common and accepted for your type of business. Necessary expenses qualify for deduction if they are appropriate and helpful in promoting, developing and maintaining your business.
Keep in mind that the IRS's definition of necessary is somewhat different than what you may normally think of as necessary. Most people think of necessary as something that they can't do without but the IRS gives a very broad meaning to the word. You may be able to run your business without gold embossed stationery, but it may be helpful in promoting your business, so you can deduct it.
The amount that is considered reasonable depends on the facts and circumstances. What is a reasonable amount for one business may not be a reasonable amount for another. Spending $1,000 on gold embossed stationery may be a reasonable amount for a business grossing hundreds of thousands of dollars a year, but may be an unreasonable amount for a business grossing $500 a year. Use your common sense here, if you think it is unreasonable, it probably is. When debating to deduct or not to deduct, I always like to put myself in the IRS's shoes. If I think I can make a good, believable argument for the deduction, I deduct.
Deductions that are likely to invite a second look by the IRS include large travel and entertainment deductions, expenses not typically associated with your type of business, deductions for items of a personal or recreational nature, or deductions that are out of line with the amount of income you are reporting.
As one of my mentors always says, "When it comes to the IRS, you always want to be a pig, but never a hog because pigs get bred and hogs get slaughtered." So be sure to take every legitimate deduction you are entitled to, but don't cross over the line and take ones to which you are not entitled.
Small business owners overpay their taxes by billions of dollars each year because they don't know exactly what they can, or can't, deduct. Don't be one of them.
Remember that each tax deduction you find is like giving yourself a raise.
For more information and a FREE copy of my Small Business Tax Deduction Checklist, visit www.MyTaxTutor.com
Online Network Marketing: A Powerful Tool for Today's Entrepreneur
The Internet truly is an amazing medium. A virtual universe of information on every subject known to humankind is available literally at our fingertips. At the same time, the Internet is a powerful communication tool. Whether for business or personal reasons, the Internet can put us in touch with people all over the world. It is no wonder that the Internet is now considered to be the most influential business innovation ever. Indeed, the Internet virtually eliminates mailing costs, provides instant communication capabilities, enables business transactions 24 hours a day, 7 days a week, and 365 days a year.
And that's just the beginning...
Network marketing is perfectly suited for the Internet, and as such many people are having enormous success building network marketing businesses online. The Internet has obliterated the old-fashioned method of network marketing: badgering family, friends, and co-workers in order to get them to buy some products. Now, you will never have to hound anyone again. By harnessing the power of the Internet, you can draw prospects from all over the world to your web site. Your marketing is done for you via your web site and the automated features that the Internet offers.
Not only can you sell products directly from your web site, you can also generate a list of leads for your business. Lead generation is probably the most profitable aspect of your business web site. Your resulting list of leads enables you to regularly contact your prospects by email, phone, and other means. This is very convenient, since many online entrepreneurs have found that most of their prospects buy their products only after having been contacted several times. Develop a system and schedule for following up with your prospects, and keep your business fresh on their minds.
Do you worry about your financial future? Is your job secure? How are you going to keep those bills paid and still save enough for a comfortable retirement? Will your boss hold on to you through the next round of layoffs? Do you have enough money left over each month to support your favorite charity?
If any of these questions are keeping you awake at night, then you owe it to yourself to learn more about network marketing. Discover what many other people are learning: that there has never been a better time to get started in network marketing. You will find that you don't have to be a computer expert to set up your own web site and marketing system, because there are many tools and resources available to people like you and me. Millions of people are making honest income from the Internet, and many have found that they can earn lifetime residual income from their efforts.
Permission is granted to publish this article free of charge either electronically or in print, as long as the bylines are included.
Chuck Tourtillott and his wife Michelle are entrepreneurs in network marketing home business.You may contact them at:chuckandmichelle@usana.com or visit their websites at http://www.robertallenroadtowealth.com http://www.squidoo.com/robertallenmentor
Your Own Home-Based Business: It's All in the Family
Balancing work life with family sure can be challenging in this day and age. Most of us are working harder and longer just trying to keep up with the bills and the overall cost of living. The cost of everything keeps going up: food, utilities, gasoline, insurance, and day care, just to name a few. It's hard to keep up and still spend quality time with your children. As a result, more and more people are choosing to start their own home based businesses.
While it's true that working from home can keep you closer to your family, it also requires a well-organized and consistent approach in order to meet the needs of both your business and family life. To be successful, you must find ways to put in the hours necessary to start and grow your business without being detoured by family matters. You will need to manage your tasks and optimize your time. If you or your spouse hold a regular job, then conscientious time management will be even more crucial. By establishing boundaries and through careful planning, you can manage your time and priorities so that your family can be an asset to your business rather than a distraction.
First, think about how you could divide business specific tasks between you and your spouse. Plan your work, then work your plan. For example, while one spouse is at the workplace holding down a conventional job, the other can stay at home and spend time working the business by writing and posting ads, doing research, ordering product, and so forth. In the evenings when the spouse returns home from the office, that person can take over duties such as answering emails and making phone calls for training and prospecting purposes, while the other attends to the children and household tasks.
Also, consider recruiting your children into your home business. They may be able to help with certain tasks. Perhaps your oldest child can babysit the younger siblings during certain times of the day or evening. Children may also be able to help by preparing items for mailing, cleaning your office, and organizing and filing paperwork (don't be shocked, however, when you get asked to raise their allowance!).
Talk with your family and come to some agreements about the importance of your home business. Make them aware of the demands it places on each member as well as yourself. Gain their understanding and cooperation. Restrict personal use of the telephone to specific times so that your line will not be tied up during your business hours (or better yet, consider having a second phone line installed to be used just for business). Lay down the law that family must stay out of your office area during working hours. To make it easier for them to adhere to your rules, try to coordinate your work schedule with family activities, and schedule some non-business time during crucial times of the day, such as when the kids get home from school and at mealtimes. Be sure to discuss your business schedule with extended family members and friends. Inform them of your working hours and ask them not to drop by or call you during those times when you are working on your business.
Work hard and fast to build your home business, and keep going! Make the whole family aware of what you are doing and what you need from them. You'll probably find that they are all willing to help however they can. The rewards will be worthwhile, and you and your family can reap the benefits for years to come.
Permission is granted to publish this article free of charge either electronically or in print, as long as the bylines are included.
Chuck and Michelle Tourtillott are entrepreneurs in network marketing with the Robert Allen Team and USANA Health Sciences.You may contact them at chuckandmichelle@usana.com or visit their web sites at http://www.robertallenroadtowealth.com
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