Everybody hates to see their hard earned income reduced because of taxes. No one likes to pay the taxman and that is why everyone is looking for tax breaks. I know I do because I was losing roughly 50% of my income to the government every year.
When we first got married and sat down with our financial advisor, I distinctly remember him telling my husband that he needed to start a home-based business to help reduce his taxes. My husband was paying high taxes as well and had very few options. So the advisor suggested he do something like a home-based business, even if meant building and selling birdhouses as a means of reducing his tax burden. That may sound like a funny idea, but it certainly left us thinking about side businesses while still in our day jobs.
So when it comes close to the end of the calendar year, it is time to start thinking about income tax and how to reduce it. Unfortunately, this can be too late. But there is a way and one that you can start before the end of the financial year – start a home-based business!
One of the main reasons why I started a network marketing business besides the lifestyle, flexibility and leverage benefits it gave me, was to have the tax benefits as well. Only by having your own business, can you benefit from the tax breaks that are available to entrepreneurs. Unfortunately many people do not know this or do not want to put the extra effort into having their own home-based business.
“Home based businesses are one of the fastest-growing segments in our economy, and that trend will only continue, as the age of the corporation, which began barely a century ago, now gives way to the age of the entrepreneur. “ – Paul Zane Pilzer
Unlike working for a company or corporation or government where your taxes are deducted from your pay upfront before you receive your check, in a home-based business, your expenses are deducted from your income first, and you only pay tax on what remains.
So lets talk about the tax benefits that are available to you if you have your own full-time or part-time home-based business.
1. Start-up / Investment
If your home-based business is a network marketing business that requires you to pay start up fees, then this fee is tax deductible.
2. Home Office
Because you are running a business from your home then, expenses related to running that office can be deducted from your income. This includes utility costs, home office equipment costs, telephone costs, organizational costs, etc that are all related to your home-based business.
Since your home-based business requires you to travel on a regular basis, then these costs can be deducted from yyour income. This includes your vehicle expenses, including lease, fuel and insurance costs. It also can include airline flights etc related to the business.
4. Samples, Demo Products and Tools
The cost of samples and demo products used in promoting and growing your business may also be tax deductible, as they may be considered a business expense. As well, any tools necessary to do the business (software, manuals, CDs, training aids, banners, etc) may also be considered tax deductible and therefore the cost of these may be included in your business expenses.
The fees that you pay your accountant to prepare your annual tax return are now a business expense and tax deductible.
Your home-based business may require you to undergo personal development, product knowledge or other forms of training, either initially or on a regular basis. The cost of this training including travel costs may be tax deductible and therefore considered a business expense.
7. Company Conventions
If your home-based business is associated with a larger organization, then attending company conventions is considered important, if not essential, to growing your home-based business. Therefore the associated travel costs may be considered tax deductible.
So as you can see from the above list, which by the way is not all encompassing, there are many good reasons to start a home-based business.
It is always important to speak with your CPA or Accountant to find out what applies to you and where you live. Tax regulations and laws can vary from state to state, province to province and country to country. However, these professionals are knowledgeable, aptly qualified, and able to give you the right advice to maximize your tax benefits.
So make sure you have professional help to guarantee there are no surprises down the road.
If you want to reduce your taxes, then I highly suggest you start a home-based business, one that does not require a lot of investment, and one that gives you a return of investment (ROI) in the shortest time possible.
A network marketing business is one way to achieve that aim!
“Network marketing gives people the opportunity, with very low risk and very low financial commitment, to build their own income, generating assets and acquiring great wealth.” – Robert Kiyosaki
Get with me on a quick phone call if you’d like to learn more about tax breaks and how to keep more of your hard earned money! Click here to contact me.