Start a Home-Based Business Today!
In today’s rapidly changing economy, the young and the middle-aged alike are realizing that their dream of “having a job with a company forever” is an illusion. Companies have been downsizing, rightsizing, and capsizing for some time now, and they will continue to do so-more now than ever before.
Even the federal and state governments are getting into the act with
layoffs and attrition of jobs.
In addition to all this uncertainty and mutual lack of loyalty between
companies and employees, even the workers who do keep their jobs have no guarantee of promotions due to the shrinking number of management positions. These circumstances aggravate the already tryingly long commutes in rush hour traffic and increasingly typical frustrated boss-spelled backwards, that double S-O-B.
Finally, if all this isn’t bad enough, under recent tax laws employees are
shafted more than ever with limits and thresholds for their employee
deductions and higher social security tax limits. This results is more
couples working than ever before and, on many occasions, working more than one job. It is now almost impossible to have only one job in the family and make ends meet! Today, many households need three incomes just to survive.
Sadly, even having more than one job does not produce any major positive effect on most people’s bank accounts.
More and more people are starting home-based businesses. In fact, there are currently over a hundred million people working from their
homes and the number is growing every day. Working from home has become and will continue to be one of the greatest mass movements in the U.S. in the coming years.
Why a Home-Based Business Makes So Much “Cents”
There are many reasons why so many people are favoring home-based over traditional business.
There is no commute (unless you have a really big home), no boss, little
if any chance of lawsuits, much lower overhead, no employees, (or few),
and far fewer government restrictions. In fact, many of the laws
previously cited don’t apply to small firms with few or no employees. It
is for these reasons, according to Entrepreneur magazine, that 95 percent of home-based businesses succeed in their first year and achieve an average income of $50,250 per year with many earning much more.
There are really two sets of tax laws in this country. One is for
employees, and it allows deductions for individual retirement accounts,
401(k)s (if you have one set up by your company), interest and property
taxes on your home (which some in Congress want to do away with ), and charity.
Then there are the laws for home-based business people who conduct their business either full-time or part-time. They can deduct, with proper
documentation, their house, their spouse, and even children (by hiring
them), their business vacations, their cars, and their food with
colleagues. They can also set up a pension plan that makes any government plan seem paltry by comparison.
If You Don’t Have a Home-Based Business, Start One!
In addition to all the benefits mentioned above, Congress will subsidize
you while you are growing your home-based business. If your home-based business produces a tax loss in the first year or so, you can use that tax loss against any other income you have. It can be used against wages earned as an employee, dividends, pensions, or interest income-or you can use the loss against your spouse’s earnings if you file a joint return.
If the tax loss exceeds all your income for this year, no problem. You can
carry back the loss two years and get a refund from the IRS for up to the last two years of income taxes paid, or you can carry over the loss twenty years. You read it right: You can offset up to 20 years of income!
Here’s an example:
Mike earns $50,000 in a job with the government. If he starts a home-based business that generates a tax loss of 10,000, he only pays tax on $40,000.
You can never lose a properly documented business deduction as long as you run your legitimate business like a business with a bona fide business purpose and have an honest expectation of profit. Also make sure that all your expenses are ordinary and necessary and reasonable as noted in our Tax Advantage and Tax Strategy Program.
The light at the end of the tunnel, for you and millions of others today,
is the financial opportunity that starting your own business offers. If
you have one going already, then make sure you are enjoying the many
financial advantages to which your smart choice entitles you. The tax
advantage alone can make a home-based business the single best financial move you could ever make.
