Death And.....

You know the old saying. They are the only two things that are certain?

Tax Advantages of a Home-Based Business

What Kind Of Tax Advantages Do Home-Based Businesses Enjoy?

You have probably thought of many of the benefits of running your own successful home based business. From the independence of working for yourself to making better income than you may currently be making, there are many reasons why you made the right decision to become self employed. One consideration that you might not have taken into account is the tax advantages that you will enjoy with a business run out of your home. Let's explore these qualifying deductions, starting with the better-known ones.


The Home Office Deduction
The deduction that likely comes first to mind that home-based businesses can take advantage of is the "Home Office Deduction". The Home Office Deduction allows you to deduct some or all of the expenses of your office at home and related expenses. To qualify for this deduction, your home office must be the principal place where your business is done. Secondly, the office space must be used exclusively for business use to qualify. For example, if you use your kitchen as your primary workspace, it is likely that you cannot take the home office deduction, assuming that you use it for personal use as well. To be on the safe side, set aside a room as your home office where possible. This will keep you on the safe side should the home office use ever come into question. Detailed explanations of who qualifies for the Home Office deduction are defined in detail by the IRS themselves.

Building-Related Expenses
Repairs and improvements to your home office are completely deductible. For example, painting your home office is an expense that relates directly to doing business out of your home, so it is deductible in full. Mortgage interest is deductible as a percentage of the total mortgage paid for your home. For instance, if your home office makes up 200 square feet of your home's 2,000 square feet total, you can write off up to 10% of the mortgage interest for your home as a business cost. Similarly, if you rent your home, the percentage of your home used exclusively for business use would also be deductible. Property taxes paid for your home also qualify at the same percentage rate as the mortgage. Furthermore, if you own your home, you can depreciate the appropriate share of the home over 39 years. Note that home expenses not related to your business, such as landscaping costs, cannot be deducted, even if you are beautifying the appearance of your home to enhance its appearance for business purposes.

How Much Total Can You Deduct?
You can deduct at most in home expenses for your home-based business what its net profit is. Thus, if you don't make much net profit, neither will you be able to deduct many home office expenses. This covers expenses specific to your home itself, such as mortgage/rent and property taxes.

Security
You may deduct the business cost of security devices and monitoring fees as a percentage of the protected area used for business use of the entire protected area (normally the entire home). This is considered an indirect cost of doing business.

Insurance
If you own your home and pay home owner's insurance, you may deduct a percentage of that expense, as with mortgage or rent expenses. If you have additional insurance coverage that covers things specifically for the business, you may deduct these expenses in full as direct business expenses. This may include special riders on your insurance policy to protect business equipment used exclusively for your business. Additionally, if you incur a loss that is not covered by insurance, if it is equipment used exclusively for your business, you can deduct the entire loss. If the property lost is for things used both for personal and business use, you may deduct just the percentage of business use.

Utilities
Using the same percentage that you can write off of your home calculated above, you can write off utilities such as electrical, gas, and other utilities as business expenses.

Transportation
If you work primarily out of your home, you can typically write off the transportation expense of getting to and from your clients' places of business and other business-related transportation costs. For the 2006 tax year, the standard cost per mile that the IRS allows you to deduct is between 18 cents and 37.5 cents per mile. Please see your accountant or contact your local IRS office for exact figures. Transportation as a deductible cost is one area where detailed records is critical. Typically, you will want to record the odometer mileage of your car before and after your trip to determine the number of miles traveled. Alternately, if you have places that you often travel to, you can just record the number of miles once and then multiply by the number of trips to determine total mileage This will prove much easier than recording each trip's mileage.

Moving Expenses
If you move, you can deduct the business portion of the move. For example, if half of the items to be moved were business-related, you could deduct 50% of your moving expenses. Note that moving expenses apply to sole proprietors, LLC's, and S-Corporations only. They do not apply to C corporations. If you have business-related moving expenses, use form 8829, "Expenses for the Business Use of Your Home" to report them.

Phones and Communications
For a home business, the first phone line into your home is considered by the IRS as a personal expense. Additional phone lines for business use, including cell phones used for your business, are tax deductible. Internet service provider fees or broadband costs such as high speed cable connections are deductible as a percentage of business use to total usage.

Meals and Entertainment
If you take a client or prospective client out to lunch and talk about your business, it is often tax deductible as a cost of doing business. If you are doing business out of town or at your convenience on a business-related task, you can typically deduct the amount of meals. If you are entertaining a client, the expenses related to the meeting are deductible if they have a business purpose. Meals and Entertainment is one area that is often abused by small businesses, so if you plan to take deductions for these kinds of expenses, be sure to keep receipts. Also keep records of what the money was used for to avoid any kind of legal entanglements later on. As with most business deductions, as long as you stay within the IRS guidelines for what is allowed and keep good records, you can take this deduction safely. You can only deduct 50% of the cost of meals and entertainment.

Tax Preparation Expenses
Though not specific to home-based businesses, the expenses that you incur to have your tax return itself prepared may be tax deductible. Also, if you use tax-preparation software to prepare your own business' tax returns, the cost of the tax preparation software is possibly deductible.

Software
Software used for business purposes are deductible as a business expense. Note that for software packages in excess of $500 in value, you may need to amortize (write off over a period of time) the software over 3 years. If you have purchased software that costs more than $500 per piece of software, consult the IRS guidelines for software deductions.

Educational Expenses
Educational expenses incurred directly to learn industry-specific skills needed for your business are often tax-deductible. For example, if you purchase the Professional Bookkeeper course to learn Accounting and Bookkeeping skills to start your business, this expense is tax deductible as a start up cost once your business is underway.

Record Keeping
Many small businesses let themselves get cheated every year by not taking deductions they are legally entitled to on their taxes for fear of being audited. As long as you stay within the IRS guidelines for what is and is not tax deductible and keep receipts and good records, you are safe to take the deductions you are legally entitled to. The Home Office Deduction in particular is a deduction that many have wrongly assumed makes them a target for an IRS audit. If ever in doubt, go directly to the source, the IRS themselves. They publish many articles defining exactly what deductions you are entitled to so that you can be sure that you are in compliance with the law.

It is definitely advisable to consult a tax preparer for specific questions regarding what would or would not be deductible, and to what extent. We simply want you to think! And know that to be forewarned is to be forearmed. Why pay those "friendly folks" at the IRS more than you must? An attorney and an accountant are the two most crucial relationships you can develop as a small business owner. If you have neither, GO GET 'EM!

Oh Grow Up!

This is why we love it when business partners contribute to our blog. It usually is profoundly brilliant.




When I Grow Up I Want To Be.
By Angelina Gutierrez


When I was a kid I used to say, "When I grow up I want to be." Then while I wasn't paying attention, one day, childhood snuck away from me and suddenly I found myself up. I wasn't as prepared as I would like to have been. Who am I kidding? I wasn't prepared at all. I looked out into the world and for the first time I took notice of the pressures that lay before me. They're everywhere. Pressure to act, pressure to try, pressure to follow, pressure to become. The list is too long. Even though no one ever has to really say a word because we have enough criticism within ourselves to pressure us for a lifetime. It's true we are the hardest on ourselves than anyone else.

It's hard enough trying to be still for five minutes when drive-thru's and microwaves aren't fast enough anymore. Suddenly life has become a race and we've fallen into the trap of comparing. But to who's standard? And are standards supposed to change? Because every time I turn around the world has a new set. Loose morals. That's what they are. It's whatever feels comfortable; whatever feels good. It's being spread across the entire earth like a sick disease, and the killer? Conformity.

And then there's disappointment. It likes to walk by your side when you hit that age when you're not where you pictured yourself to be twenty, ten, or five years ago. That's when you have to learn to ease up on yourself and make contentment your friend because no matter how many years we live, we still have a while to go. And no matter how many struggles, sufferings or mistakes we go through we still have a lot more of those coming our way too. So after all is thought through you reach a point where you realize that "In God We Trust" really wasn't just a nice quote to decorate our money. There were those that believed it to the core of their being and died knowing that no matter what changed, their God never would.

I'll be turning thirty in 51 days and yesterday someone asked me, in all seriousness, what I want to be when I grow up. At first I laughed at the feeling I got of being a kid again. I haven't been asked that question for about fifteen years. It got me thinking though. No matter how many times I didn't meet my expectations there's always been room for another chance. I've just recently come to realize that age is not the issue. The issue is we can be whatever we want to be, and we can start today by working towards it, never conforming to what we don't believe in and putting our trust in God.


ABOUT THE AUTHOR:
Angelina Gutierrez is an administrative assistant living in California. She spends her time taking care of her 4 year old daughter, working towards personal goals and achieving the very best that life has to offer.

You Know You Need It! Here's How To Get It!

"Drop and give me seven!"





C'mon, let's be honest with ourselves. If there is one thing we ALL could use more of in our businesses, it's discipline.


The Practice of Discipline
By: Brian Tracy

Discipline yourself to do what you know you need to do to be the very best in your field. Perhaps the best definition of self discipline is this: "Self discipline is the ability to make yourself do what you should do when you should do it, whether you feel like it or not." It is easy to do something when you feel like it. It's when you don't feel like it and you force yourself to do it anyway that you move your life and career onto the fast track. What decisions do you need to make today in order to start moving toward the top of your field? Whatever it is, either to get in or get out, make a decision today and then get started. This single act alone can change the whole direction of your life.

Seven Steps to Success

There is a powerful seven step formula that you can use to set and achieve your goals for the rest of your life. Every single successful person uses this formula or some variation of this formula to achieve vastly more than the average person. And so can you. Here it is:

Decide What You Want Step number one, decide exactly what it is you want in each part of your life. Become a "meaningful specific" rather than a "wandering generality."

Write it Down Second; write it down, clearly and in detail. Always think on paper. A goal that is not in writing is not a goal at all. It is merely a wish and it has no energy behind it.

Set A Deadline Third, set a deadline for your goal. A deadline acts as a "forcing system" in your subconscious mind. It motivates you to do the things necessary to make your goal come true. If it is a big enough goal, set sub-deadlines as well. Don't leave this to chance.

Make A List Fourth, make a list of everything that you can think of that you are going to have to do to achieve your goal. When you think of new tasks and activities, write them on your list until your list is complete.

Organize Your List Fifth, organize your list into a plan. Decide what you will have to do first and what you will have to do second. Decide what is more important and what is less important. And then write out your plan on paper, the same way you would develop a blueprint to build your dream house.

Take Action The sixth step is for you to take action on your plan. Do something. Do anything. But get busy. Get going. Do Something Every Day Do something every single day that moves you in the direction of your most important goal at the moment. Develop the discipline of doing something 365 days each year that is moving you forward. You will be absolutely astonished at how much you accomplish when you utilize this formula in your life every single day.

Action Exercises Here are two things you can do to put these ideas into action immediately. First, decide exactly what you want, write it down with a deadline, make a plan and take action - on at least one goal - today! Second, determine the price you will have to pay to achieve this goal and then get busy paying that price - whatever it is.

About the author: Brian Tracy is Chairman and CEO of Brian Tracy International, a company specializing in the training and development of individuals and organizations. Brian Tracy has consulted for more than 1,000 companies and addressed more than 4,000,000 people in 4,000 talks and seminars throughout the US, Canada and 40 other countries worldwide. As a Keynote speaker and seminar leader, he addresses more than 250,000 people each year. He has studied, researched, written and spoken for 30 years in the fields of economics, history, business, philosophy and psychology. He is the top selling author of 40 books that have been translated into dozens of languages. To learn more about Brian Tracy, please visit his website – www.briantracy.com. Or you can write to Brian Tracy International, 462 Stevens Avenue, Suite 202, Solana Beach, California 92075 (Phone 858-481-2977 – Fax 858-481-2445).

Want To See Your Future For The Rest Of 2006?

"Wait a minute, wait a minute...I think I see something."

Kiplingers Agrees With Us!

Get out your shades because your future looks bright.

Web Shoppers Looking for More on the Internet
By Jim Ostroff July 10, 2006

Retailers of all stripes can expect to see their online sales grow next year. More shoppers are tossing a wider array of products into their virtual baskets as they become more at ease shopping online. The rapid spread of high-speed connections and retailers' efforts to make their Web sites more user friendly are also big reasons online shopping is becoming more mainstream.

Web sales of everything from apples to zinnias will climb 20% this year over last and another 20% next year, when Internet sales will top $250 billion, nearing double digits as a share of the $2.9 trillion in total retail sales. "Now that people have had a good experience in buying a video, software or a book online and realize there are no hassles in doing returns, they're buying products they usually wanted to see and feel" in a store, says Scott Silverman, executive director of Shop.org, an online retail sales trade and research group.

Some of the more surprising products now catching fire online, according to Forrester Research, are autos and auto parts, up 14% so far this year over last; home appliances, up 26%; jewelry, 17%; and cosmetics, 33%.

More-interactive Web sites are a big draw. Just a photo of the item for sale and its price won't cut it anymore. To boost sales, savvy merchants are providing 360-degree views of merchandise, posting product reviews—good and bad—from previous customers and staffing their sites with knowledgeable salespeople who can reply instantly to a shopper's questions online or even by phone once a customer clicks an on-screen call button.

Sophisticated Web sites aren't just for the big boys anymore. A variety of companies, including Amazon Web Services, Fry Inc. and GSI Commerce, can create them for just about any retailer at affordable rates. Yahoo Small Business provides off-the-shelf designs and support from $39.95 a month plus 1.5% of each sale for the most basic type of site to $99.95 a month for sites with nearly every option available. For those wanting to outsource virtually everything about their Web sites except ringing up the sale and filling product orders, a company such as Demandware can help. It promises to keep updating sites with the latest

innovations so retailers won't fall behind their competition. Retailers pay an annual subscription fee based on their revenues.

http://www.kiplingerforecasts.com/home/stories/