TAX INFORMATION - KNOW YOUR RIGHTS!

Now that you have a home-based business, it’s time to take advantage of the TREMENDOUS tax advantages available to you! Nobody likes tax time, but owning a home-based business can literally save you thousands of dollars a year in taxes by allowing you to turn personal expenses into legitimate, allowable business deductions.

The more tax deductions your business can legitimately take, the lower its taxable profit will be. For example, if you earn $100,000 per year from your job and home-based business, combined, but have $15,000 in allowable business deductions, you would only pay taxes of your net income of $85,000. At 30% tax rate, that could save you $4,500 in federal taxes!

We recommend you talk to your accountant about allowable tax deductions, but here are some tax strategies to keep in mind:

Auto Expenses
You can either keep track of and deduct all your actual business-related expenses, or simply deduct 50.5 cents per mile from Jan. 1, 2008, to June 30, 2008, (up 2 cents from 2007). The rate is 58.5 cents for each mile driven during the rest of 2008. Keep track of mileage & how the vehicle is used.

Education/Training Expenses
Costs of training meetings, training programs and manuals, books, online training subscriptions, etc.Also deduct Legal and Professional Fees, (Fees you pay lawyers, tax professionals or consultants).

Business Entertaining
You may deduct 50% of the cost for entertaining existing or prospective customers, if it is either "directly related" to the business, and business is discussed, or "associated with" the business, and the entertainment takes place immediately before or after a business discussion. (Keep notes of the people involved and the business purpose.)

Travel
When you travel for business, you can deduct many expenses, including the cost of plane fare, costs of operating your car, rental cars, taxis, lodging, meals, shipping business materials, dry cleaning, telephone calls, faxes and tips. It's OK to combine business and pleasure as long as business is the primary purpose of the trip. If you take your family along, you can deduct only your expenses, just as if you had traveled alone.
Interest and carrying charges on credit cards and business loans are fully tax-deductible.

Computers and Software
You can now write off a whole computer system in the year that it was purchased if the total cost is less than $25,000, and if it is used exclusively for business purposes. (IRC Sec. 179) In most instances, software bought for business use must be depreciated over a 36-month period, unless you can demonstrate that it has a useful life of less than one year.

Charitable Contributions are deductible
Rules vary depending on whether you are an LLC, partnership, S corporation, or regular (C) corporation, the corporation can deduct the charitable contributions.

Advertising
All expenses involved in advertising or promoting your business are deductible, i.e. business cards, classified ads, yellow pages, brochures and flyers, etc. Also includes signs for home or car, event signage, extra websites, etc.

Household Expenses
This can be one of your most valuable deductions. To qualify, a percentage of your home must be used "exclusively and on a regular basis" for your business. (It doesn't have to be an entire room.) Hints: Have your address on your business cards and stationery, have a photo of you in your office, holding a newspaper to validate the date, and keep a log of what you're doing in your office.

Often Overlooked Expenses:
Business expenses related to your health & wellness business, like the make up kit, Air source, any team or church donations in your business name. Products you buy to let others sample, or share at social or business events with your business advertised.

If you own your home, you can depreciate a percentage of all acquisition costs of your house and home improvements over a period of 39 years. You can depreciate 100% of expenditures and improvement costs to your office space.

A percent of all household expenses, including property taxes, mortgage interest, homeowner's insurance, utilities, property maintenance, alarm systems, snow removal, grass cutting, etc.

Office furniture and equipment - Have you bought any desks, chairs, computers, files, lamps…Up to $20,000 in business furniture and equipment can be deducted in one year.

Homeowner's insurance, utilities and related expenses based on the percentage of their use in the home office.

Household maintenance - Repairs to your home office are fully deductible. Repairs to the whole house would be deducted on a percentage basis.

Snow removal and lawn maintenance, even a percentage of your landscaping.

Don't Miss These Miscellaneous Deductible Items:
Sales aids, i.e. audio and videotapes, CDs, DVDs, books, etc. related to your business.
Bank service charges - you can avoid these by getting a free checking account. 100 % deductions for hiring children or grand children - pay them up to $4500 per year. (They pay less %)
Business gifts - up to $25 purchased for customer or distributor - even if they're related to you.
Business-related magazines and books
Casual labor and tips
Casualty and theft losses
Coffee and beverage service
Office supplies - paper, toner, clips, tape, staples, etc.
Online computer services related to business - lead generation, IR HomeSites, etc.
Parking and meters
Photocopies - handouts, flyers, training materials, etc.
Postage - stamps or shipping on anything sent to partner or customer or prospect
Stationery - cards - even holiday cards to above
Seminars and trade show fees - monthly team dues, meeting charges or tickets for all events
Taxi, train, shuttle and bus fare
Telephone calls and phone cards when away from the business
We've been told a dog is a security system for your business - therefore deductible

The cost of at least the first order 100 % deductible, also the price of a started kit, whether it's $299 or the $39.95. A lot of people also write off the first time they buy anything because it's a demo. Others write off everything they buy personally because it's a vital part of their business.

NOTE: If there's a possibility you may sell your house, talk to your accountant about the tax ramifications. "Unless 100 % of your home qualifies as a principal residence for at least two of the five years preceding the sale, you'll have to pay capital gains tax on the business portion of your home."

For more info: http://www.irs.gov/newsroom/article/0,,id=202106,00.html