Home-Business Tax-Deductions... Do YOU Qualify?

Home-Business Tax-Deductions...Do YOU Qualify? Are You SURE?
by Ronald R. Mueller, MBA

Whether you’re a seasoned MLM pro or brand new to the MLM business, you’ve probably been told that there are lots of tax advantages to having a home based business, right?

But I’ll bet the well-meaning people who told you that,failed to tell you that there are certain requirements youmust meet to qualify for those tax breaks. The require-ments are not difficult to meet (if you know what they are), but taking the tax deductions without knowing the “rules to qualify,” is very, very risky.

IRS auditors are given a set of “8 Secret Factors” to use in determining if your activity qualifies as a legitimate home-based business. They’re not called “secret” because they’re classified, but because they’re not disclosed openly to the taxpayer.
If you meet the most important of the 8 factors, your business can qualify for thousands of dollars in legitimate tax deductions. Since they’re not ‘classified,’ here are the four most important criteria…

#1: Expertise of the taxpayer or his/her advisors. This is a slam-dunk for MLM’ers, because we all have upline who have expertise, even if we do not.

#2: Time and Effort the Taxpayer puts into ‘running the business’. They just want to make sure you’re running a real business, not just engaging in a hobby. How much “time and effort” is enough? The United States Federal Tax Court has ruled that “45 minutes a day, 4 to 5 days a week” qualifies.

#3: The Manner in Which the Taxpayer Carries On the Business Activity. This one is common sense. Do you conduct your business mostly on the telephone, over the internet and in-home presentations (these are good), or mostly at the golf course, during lunches and at the pub (not so good). Just treat your business like a business.

#4: Is the Primary Purpose of your activity to ‘Produce a Profit,” or to ‘Produce Tax Write-offs’? The best way to pass the profit-motive test, is to have a Business Plan, and that Business Plan should include a table of Income and Expense projections, clearly showing profitability at some point in the future. Note that you are not required to actually produce a profit in order to qualify for home-business tax deductions -- just to show that you have the intent to produce a profit.

Congress wants to encourage the average taxpaying American to have a home-based business because it is good for the overall U.S. economy. So they passed legislation telling the IRS to give thousands of dollars in tax deductions and tax refunds to anyone who has a qualifying small or home-based business -- OR who had one at any time in the past 3 years!

Why??? If you to have an additional stream of income in place, and you get caught in a downsizing/layoff situation, you’ll have another source of income which you could ramp-up to fulltime almost immediately. That helps lessen the impact of sudden unemployment on the U. S. economy.

They’re also betting that some of us will hit on a winner, strike it rich, and, then pay a LOT in taxes. Of course we won't mind paying a lot in taxes if we're making a boatload of profits, right?

By the way, you may even qualify for these deductions retroactively! Most of the tax deductions and write-offs now available to taxpayers who run a small or home-based business, also apply to the past 3 tax years.

That's right! If you had a home-business in any of the past three years, you could be eligible to file an Amended Tax Return (Form 1040X), and possibly get a Refund Check for THOUSANDS of DOLLARS ­ plus interest!

Think of your home as a 'place of business.' Does a traditional business write-off its Gas, Electric, Water and Sewer bills as 'costs of doing business?' Yes, of course, and so you can write-off a portion of your utility bills, too.

How about a business's Rent or Mortgage? Yes again. So, if your 'place of business' is your home, you too can claim a tax deduction for a portion of the rent or mortgage on your home. (Finally, renters get a tax break!)

Your Vehicle can be worth HUGE tax deductions if you use the 'IRS Two Business Location Rule' to convert non-deductible 'commuting' miles into fully deductible business miles. Every 1,000 commuting miles could be worth $360 in tax deductions, if you understand this Rule and follow some simple procedures For many taxpayers, vehicle mileage deduction alone are worth some $3,000 to $5,000 or more in new tax deductions.

Do you have Kids who you give 'spending money' or an 'allowance' to? If you 'employ' your kids to do part-time work in your home-business, money that used to be called 'Allowance,' can become 'Payroll.' That means the money you pay them would become tax-deductible to you, and the income they receive would be tax-free to them.

Do you, like most people, spend hundreds (or thousands!) of dollars on health-related expenses that are not covered by insurance? For example, annual deductibles and co-payments, or non-covered items like orthodontics, hearing aids, chiropractic, etc. By employing your spouse in your home business, there is a way you can claim every single dollar that anyone in your entire family spends on non-reimbursed health costs.

Do you find yourself talking business while you’re on Vacation? If you’re a serious entrepreneur, you’re always talking business, right? If you plan your trip properly in advance, you could deduct up to 100% of your expenses, including ‘play time.’
Do you know that you can immediately write-off up to $100,000 on purchase of business equipment ­ including certain New Vehicles? This is brand- new tax law, so even your accountant may not be aware of it.

These are all 100% Legal Deductions! There are dozens of others also. The rule of thumb is, 'If a traditional business can deduct it, your home-business probably can also.'

Today, anyone who does not have a home based business, is losing a valuable additional stream of income AND thousands of dollars in honest tax breaks.

Save a Bundle!
Ron Mueller Author

EDITOR'S NOTE: Ron Mueller is co-author of best seller,“It’s How Much You KEEP, That Counts! Not how much you Make,” which he refers to as the “ultimate step-by-step tax reduction system for small & home-based businesses,” available on his web site at www.homebusinesstaxsavings.com for as little as $37.00 You can also subscribe to his free newsletter, “Tax Tips You Can Bank On” at the same web site.

There's a LOT of 'Tax Tips You Can Bank On,' and I hope you found them useful.

The Ethics of a Christian Debt Consolidation Company

There are a number of Christian debt consolidation companies which may appear to be against a lot of Christian's beliefs. However, these Christian debt consolidation companies ensure fellow Christians that it is Biblical to take advantage of a program run by a Christian debt consolidation company.

Read complete article, The Ethics of a Christian Debt Consolidation Company

How to minimize your taxes on wealth

Taxes on wealth or simply wealth tax is the tax levied on the value of wealth owned by a person. As the term 'wealth' carries with it a broader meaning, generally capital transfer taxes (which include inheritance tax and gift tax), property tax, and capital gains taxes are some times invariably referred to as wealth taxes.

...with intelligent investing, one can save a lot that other wise goes as wealth tax. But that requires careful thought and advanced planning. May be a tax professional could help one in this regard.

Visit Home Business Tax Savings and read How to minimize your taxes on wealth

The Internet Growth Trend...

As I'm sure you've realized, combining the Internet with Home Based Business Income is a TREND that's literally exploding! The Internet has ARRIVED, and the number of on-line users all over the world grows by hundreds of thousands weekly!! It's the 21st Century GOLD RUSH, and it's ONLY JUST BEGUN!! :-)

By joining us and aligning yourself with our powerful financial education and technology company, you're positioned to experience the benefits of the explosion of online education and home-based business ... and to make as much MONEY as your goals require!

Financial Freedom Society brings the power of online financial education to the masses.

Thoughts on Financial Freedom

by Chris Widener
(excerpted from Week 16 of the Jim Rohn One-Year Success Plan)

Hi there, Chris Widener here. Below are some questions to think about, but first a few thoughts on financial freedom and how to find it for yourself.

Financial freedom is a buzzword for our generation. It is the pursuit of literally millions of people. So what is it? Is it that elusive? Can anyone achieve it?

Let me start by saying that this is not about how to earn money, or even more money. Rather, it is about how to find financial freedom, which surprisingly, may or may not involve making more money.

The first step in finding financial freedom is to realize that financial freedom has absolutely nothing to do with how much money you have or make.

What? Exactly. Financial freedom is something that goes on inside of you.

This is why someone who makes very little can be happy and someone who makes a ton can be extremely stressed out over his or her financial situation. So the first step is to realize that financial freedom is more about our attitudes toward money than about the amount of money.

"Okay Chris, I'm with you. So what are the attitudes that provide financial freedom?" Here are a few that keep me in financial freedom.

I do not have to worry about money. I used to catch myself saying, "If I had more money, then I wouldn't have to worry about..." But do you know what? I don't have to worry anyway. I can control my income. I can control my outgo. I can make choices that can alleviate any of my worries. I also realized that things always work out. So why worry? I choose not to worry. I work hard, invest, plan for the future and I do not worry about it.

I can be happy regardless of my financial state. I know people who are worth hundreds of millions of dollars and I know people who don't have two nickels to rub together. Some are happy and some aren't. And none of the people who have a lot of money say to me, "Chris, I've become so happy since I got money." They were happy before they had money and they are happy now that they have money. Their happiness has nothing to do with the money. Billionaire David Geffen once said, "Anyone who says that money will buy them happiness has never had any money."

Money is a means to an end, not the end itself. Another way to look at it is that money is a tool to build the house, not the house itself. I would set some financial goals if I were you, but go beyond that to know what greater purpose there will be when you reach them. What will the house be used for that you build with this tool?

I am free. I am free to earn - some people think it is bad to earn more money. It isn't.

I am free to save - some people believe it is bad to save. It isn't.

I am free to give money away - some people feel they will be better off hoarding it. They won't.

I am free to spend - some people believe that they can't spend anything on themselves. They can.

We are free to make choices. That is financial freedom.

Embrace delayed gratification. Here is the principle: Buy it now and struggle later. Another principle: Delay buying it now, invest the money, and have all you want later on! And you won't even have to touch the principal! We tend to think that having it now will bring enjoyment, but unless you can do it and not cause yourself financial stress, you will actually get more from waiting!

Have more by managing better. The fact is that most of us earn enough. What would be beneficial is to set our priorities and live by a budget. As we get control, our budget will loosen up a bit and we will find ourselves enjoying it more. Money that is already there can be your answer if you put it to work for you.

You can experience financial freedom no matter how much money you have. Granted, it is great to build wealth and that should be our goal, but no matter what level you are currently at, or what level of wealth you ultimately attain, if you keep money in the proper perspective, you can be happy and free.


Questions for Reflection:

Q. Do you have an investment plan? Do you follow it? How well?

Q. Do you have a plan to invest in hard assets? Income producing assets?

Q. What ideas do you have that you can invest in?

Q. Are you investing in your company? If so, how? If you don't have one, have you considered starting one? What would it take for you to step out and do so?

This week take some time and put some thought into your Financial Freedom plan, then take the action necessary to accomplish your Freedom!


Reproduced with permission from the Chris Widener Ezine. To subscribe to Chris Widener's Ezine, go to http://www.chriswidener.com or send an email with Join in the subject to subscribe@chriswidener.com Copyright 2006 Chris Widener International. All rights reserved worldwide.

One Step at a Time

The only way to start to improve your life is to start.

Once you're sure you're on the right road there is no
need to plan your journey too far ahead.

Don't burden yourself with doubts and fears as to
the obstacles that may bar your progress.

You can only take one step at a time.

You don't need to know all the answers in advance.
Just maintain a clear idea of the goal you want to
reach and the answers will come in their own time.

If you can get up the courage to begin,
you'll have the courage to succeed.

It's the job you never start that takes the longest to finish.

Go after what you want and you'll get it.
Eighty percent of success is showing up.

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©2005 by Max Steingart www.maxsteingart.com
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Personal Finance Is Your Responsibility

Whether or not you choose to ignore it, you cannot deny the truth embedded in this statement: Your personal finance is and always will be your responsibility.

When it comes to finance, many people close their eyes to the fact that finances need to be managed. Personal finance is an ever-growing issue for adults and teenagers alike, regardless of whether you are earning the money or not. After-all bills have to be paid, family members have to be fed and your lifestyle has to be maintained.

The biggest and most neglected step for many families is teaching their teens how to manage their money. Think back to when you were a teenager... your parents probably didn't teach you about finances either. Teenage finance is about educating teens on the value of money. Teach them how to save by showing them how to use their primitive form of bookkeeping. This can often be accomplished through the child's upbringing via piggy-banks, savings accounts, and little chores in exchange for money.

Teenage finance is an important part of your personal finance also because when your children learn to save and use money wisely, you are subsequently saved from bailing them out of financial troubles in the future.

Read more Personal Finance