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Local Business  » 10 Reasons To Start A Home Business

10 Reasons To Start A Home Business

1: Tax Advantages Business Deductions. To qualify as business

deductions, expenses must be reasonable and necessary. Taxpayers

are required to keep accurate books and records. The records

should be complete enough to include types and sources of

income, gains, losses, costs, expenses, and substantiation for

tax deductions. Your records should include items such as bank

statements, cancelled checks, receipts or invoices, credit card

statements, diaries and logs. Here are some examples of what you

could deduct. Remember...also check with a professional first.

Tax Deductions for Home-Based Businesses 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 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 from

your business, 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 keep track of and deduct all your actual

business-related expenses. Again, make sure you get the exact

information that applies to your circumstances.

Education/Training Expenses Costs of training meetings, training

programs and manuals, books, online training subscriptions, etc.

Legal and Professional Fees, Fees you pay lawyers, tax

professionals or consultants

Business Entertaining You may deduct a certain % 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. But if you take your family along,

you can deduct only your expenses, just as if you had traveled

alone.

Interest Interest and carrying charges on credit cards and

business loans are fully tax-deductible.

Computers and Software Check with your accountant about the

rules that apply to your business.

Charitable Contributions are deductible Rules vary depending on

how your business is registered. Get the details that apply to

your business.

Advertising All expenses involved in advertising or promoting

your business are deductible, i.e. business cards, classified

ads, yellow pages, brochures and flyers, 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.

Often Overlooked Expenses

Business related long distance services. Improvement costs to

your office space. A percentage 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 purchased any desks, chairs, computers, files,

lamps...Up to a certain amount 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 - would be deducted on a percentage basis. Snow

removal and lawn maintenance. NOTE: If there is any possibility

you will sell your house within the next several years, talk to

your accountant about the tax ramifications.

Note: This list of business expenses is not inclusive. If the

item you're thinking of using as a business tax deduction isn't

on this list, that doesn't mean it's not a legitimate business

expense. Check with your accountant Business Expenses *

Accounting & Legal fees (related to business activities) *

Advertising expenses * Automobile expenses * Bad Debts * Bank

Charges * Business Taxes & Business Licenses * Collection Agency

fees * Conference and Convention fees * Expert Advice

(consultant fees, for instance) * Interest expenses (on money

borrowed to run your business) * Insurance expenses (for

buildings, machinery or equipment) * ISP fees (business use) *

Membership Dues (for business-related organizations) * Meals and

Entertainment expenses * Office Rent expenses * Office Supplies

expenses * Postage & Courier expenses * Private Health Service

Plan (PHSP) premiums * Promotion expenses * Property Taxes *

Repair & Maintenance expenses * Salaries of employees -

including salaries of family members *

Telephone/Telecommunications expenses * Travel expenses *

Utilities

More Reasons for working from home.

2: Personal Freedom to come and go as you please. Did you ever

want to just spend a day with your family? Did you ever want to

attend a special funeral but you had to work? What about

visiting someone in the hospital? Can you just take a few hours

off in the day? This is one of the best reasons for having a

home business...you are able to manage your own time. This does

not mean working less; rather it means flexibility of time

scheduling. 3: You get to keep the profit. All of it. This needs

no explanation. If you work hard, if you are committed to your

business, you will reap the benefits...and you will also get to

keep the profit. 4: No Boss. The stress of working for an unfair

and egotistical boss can be tremendous. It has even been

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suggested that this kind of stress can lead to heart disease.

Work related stress has been the cause of marriage break ups.

Some people just cannot come home at night and leave their work

related issues AT the office. They bring their concerns, fears

and frustrations home with them...and the whole family suffers

under this strain. I had a wonderful boss for 25 years. That

changed. I work from home now. 5: No stress about co-workers.

Numerous studies show that office stress is associated with

susceptibility to illness such as cold and flu including carpal

tunnel syndrome. You spend 8 - 10 hours at work. If you do not

get along with your co-workers, if there is a lot of office

politics these hours 8 hours can seem an eternity. Office

politics and employee dissention can eat away at the inner core

of your being. 6: You get to raise your own children. By

choosing to work at home, you can choose your own business hours

and personal hours to fit your needs. Many successful home

business entrepreneurs will also hire nannies to look after

their little ones while working in their home office. They love

being there for their children and can still devote the

necessary hours to their work. 7: You get to be creative. No one

can limit your talents. You can outsource what you are not good

at doing. Instead, you can concentrate on what you are good at

doing. 8: No rush hour traffic or concerns about driving in bad

weather. Working at home means you wake up and look out the

window; you either smile or frown at what you see and go get

yourself a cup of coffee. You watch the news; you watch the

traffic problems, and then you go to work, at home.

If you have kids at the daycare, you know all too well the

stress of getting there on time to pick them up after a long day

at work. Daycare workers may love to look after your little

treasures in the daytime...but, come a certain time in the

evening, and they want your little ones gone. Many daycare

workers charge a big fee for overtime, and rightfully so, but

many also get very upset when the children are picked up late.

9: Not being tied down by someone else's demands. Do you have

to work when asked to do overtime? Are you worried about losing

your job if you do not comply? Do you feel pressured to work on

your days off? Do you make plans to be with your family only to

have your boss veto your plans? Working at home means you are

able to schedule your own time. 10: Most important...You choose

with who you work. You choose how you work. Always remember,

working at home does NOT mean working less.

One very special reason... especially this time of year, to

start a home based business is TAX ADVANTAGES! Keep your hard

earned dollars out of Uncle Sam's pocket

About the author:

My name is Ruth Bird. I have been married for 27 years to my

husband Chris. Chris has been battling the monster, MS, for a

number of years. To visit my home business and tax site, click

here.