5-Simple Ways How To Make Your Tax Deductions Work For You!
ADVICE FOR THE SMALL PRACTITIONER
There are some first-hand challenges that small business owners face. Particularly with the accounting industry, larger firms have been able to “restrict the small practitioner.”
An Accountant must be licensed in the state or country in which he/she practices, so a small practitioner “who has a license in California, cannot go to Minnesota and do an audit,” whereas larger firms have “themselves covered by having offices all over the country and being licensed in all states.”
With the lobbying power to swing legislation in their favor, the larger firms, in effect, squeeze the smaller practitioner out of the market. However, there is the opportunity for smaller practitioners to band together, to gain clout and influence in the industry.
Most of the advice given here, however, applies not just to Accountants, but to all small business entrepreneurs who want to increase their income by maximizing their tax deductions.
The secret to maximizing your deductions is strategy, pure and simple. Entrepreneurs need to strategize ahead of time, so that by December 31st, you have put yourself in a position to get that tax deduction.
Here are the 5 Simple Ways How To Make Your Tax Deductions Work For You:-
1. AUTO EXPENSES
The key to being able to write off auto expenses is the same as with any other home-based business deduction “PLAN AHEAD!” This is even more important if you have a W-2 job in addition to your home-based business.
If you plan your commute so that it intersects with driving for your home-based business, then the commute mileage is deductible. “If you work your home-based business at home in the morning and then go directly to your W-2 job, that’s not tax deductible mileage according to most recent IRS Ruling.”
However, if you stop somewhere along the way (ideally close to your home), even if it’s just your P.O. Box or the Post Office to pick-up or drop off your home-based business mail, to mail Simple Cheap & Ugly Postcards or Product Samples to prospects & potential customers that mileage from the P.O. Box to your office is then tax deductible.
It’s the same thing on the way home, “As long as you make a stop related to your home-based business.” This deduction is tremendously valuable, especially if you have a long commute.
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2. THE VALUE OF PROSPECTING & PRODUCT SAMPLING
Even if you don’t commute to a W-2 job, you can still deduct mileage expenses involved with your home-based business by prospecting and do product sampling wherever you go. Even host Product Sampling Events, they are tax Deductible too!
Whether it be handing out prospecting literature including brochures, DVD’s, flyers, product samples, or network marketing for new contacts, anytime you prospect for your home-based business the mileage is tax deductible.
Even if you met a prospect at the grocery store, all of the miles between are tax deductible. Turning what would be personal expenses into tax deductible expenses is simple if you plan ahead to prospect and do product sampling.
All you need is a supply of prospecting materials and products to sample in your car and with you all the time and you are ready to turn most errands into prospecting/product sampling trips.
NOTE: The money that you spend on prospecting materials and products for sampling are not an expense, but can be tax deductible too… So stop seeing your monthly qualifications, hosting events & parties and getting marketing material as a burden. They are an investment, if used correctly.
Not only will you be maximizing your business deductions, you will be growing your business at the same time.
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3. LEASE YOUR VEHICLE
Leasing your vehicle can bring a much greater write-off than if you own your vehicle. “The lease is the most advantageous because you are not limited to any certain dollar amount or if you are part of a company that pays for your car, go for it!”
If you lease a vehicle for $500 a month, you may be entitled to a $6,000 (plus expenses) write-off over 12 months. “If you purchase a vehicle, your write-off is limited to a certain depreciation amount, which is about $3,200 the first year.”
In every situation there are minor adjustments, which your personal Tax Adviser can help you with.
4. HIRE FAMILY MEMBERS
Another tax advantage that is recommended is hiring family members. To deduct their wages, the requirements are pretty straightforward, “Hire your children or spouse for services performed and pay them on a consistent basis as you would any other employee, as long as the child is under 18 it’s free of social security.”
Also recommended is putting their income into a joint account, “held by you and the child.”
As a parent you are allowed to use those funds from the account to purchase things for the child, from music lessons to school clothes, thus converting another personal expense into a business expense.
The most important thing to remember when hiring family members is that they must perform services of value.
A number of services that your children can perform for your business are:-
· Helping you meet and keep track of your new prospects,
· Maintain an email database of contacts,
· Keeping the office area clean,
· Help create gift packages and sample packs,
· Fill mailboxes in your area,
· Assist when you go to trade shows,
· And many, many more…
Here is a perfect example of how to get a family member to help you with getting product samples ready and make it a Family Business. Featured in the video below is Michael Dennis Jr., who was helping his Father — Michael Dennis, an Organo Independent Distributor. Find out more about Michael Dennis & his home-based business at — Java Uptown Charlotte Organo Gold
5. TRAVEL EXPENSES
Because we know you will be very successful, you will be doing lots of travelling to either do presentations or business building assistance for your team members all over the world and also enjoying vacations in exotic locations, how to turn a vacation into a business trip which is tax deductible is a must.
We are literally spending more on travel and pleasure than ever before as entrepreneurs. This is a great opportunity for home-based entrepreneurs to convert what would normally be vacation expenses into a tax deductible expense.
Let us state it clear, “the way the law is written, it is actually quite easy to turn a vacation into a business trip.” It only takes a little bit of strategizing ahead of time. When planning your trip, make sure you spend more than 50 percent of the total number of days on business. (Four or more hours of work constitutes a business day.)
Here is an example:
You begin your trip to Jamaica on Wednesday, to return the following Thursday. Wednesday counts as a business travel day, then on Thursday you do some prospecting and go to a meeting or company conference that night, again totaling more than four hours. That is a second business day.
You spend Friday, Saturday, Sunday, Monday and Tuesday having fun with the family.
The following Wednesday is spent on business and Thursday you travel home, which are your third and fourth business days. Because you did business in the same city and country on weeks that sandwiched a weekend, you also count Saturday and Sunday as business days. That gives you six business days out of nine (you only need five) and so the whole trip is deductible!
Also, if you have your spouse and children as employees, their expenses may be tax deductible as well. Ask your Tax Practitioner for advice to make sure you properly plan to get the most deductions possible.
HAVE YOUR TAX RETURNS PREPARED BY A QUALIFIED PRACTITIONER
It may sound simple for the home-based entrepreneur to turn personal expenses into business expenses. However, strategizing ahead of time to take advantage of deductions is really only the first piece of the puzzle. The second piece is just as important. “You then need a Qualified Tax Practitioner who knows the tax law and is detailed enough to prepare your return,” including all those deductions that you planned for and will save you money, and effectively increase your income.
Find out how to get all this valuable Tax Saving Information, that will put money in your pocket and how to start a home-based business + you will also get the latest “Itelecommute.org Resource Directory” with over 200+ Companies & Business you can do from home, please contact me at the information listed below…
About the Author:
- Rohan McLeod is an International Business & Marketing Consultant with Maximize My Leads Pros — www.Maximize.MyLeadCompany.com.
- Owner & C.E.O. of Surprise Jewelry In Candles — www.SurpriseJewelryInCandles.com, an international company which offers Premium Eco-friendly 100% All Natural Soy Wax Candles with a hidden piece of quality jewelry in every candle & tart. Visit, like and follow on Facebook at www.Facebook.com/LightsOfSurprize
- Owner & C.E.O. of Time Of My Life Café — www.TimeOfMyLife.OrganoGold.com — Purveyors of Premium Gourmet & Gourmet Coffee, Gourmet Teas, Gourmet Iced Teas & Gourmet Hot Chocolate in 39+ Countries. Visit, like and follow on Facebook at www.Facebook.com/Cafe.DeRoyale
We are not rendering tax, legal, accounting, or other related professional advice. We have used our best efforts in preparing this article.
The accuracy and completeness of the information provided herein and the opinions stated herein are not guaranteed or warranted to produce any particular results, and specifically disclaim any implied warranties, and expressly state the advice, strategies, and/or recommendations contained herein may not be suitable for every individual. We shall not be liable for any profit or loss of profit or any other damages, including but not limited to special, incidental, consequential, or other damages.