Home-based Business Builder

Ordinary and Necessary Business Expenses

Shannon West — Fri, 15 Sep 2017 19:12:02 +0000

The more informed YOU are as a taxpaying business person, the greater the impact on how much money is in your pocket at the end of the year.

The tax code allows you to deduct costs of doing business from your gross income, the total amount of money you made. The Money remaining, (Gross Profit – Business Exspenses = Netprofit) is your net business profit. This is the amount of money that gets taxed, taxable income.

One of your key focusses should be knowing how to increase your deductible business expenses which lowers your taxable income. An added plus is, you may enjoy a personal benefit from a business expenditure; a nice car to drive, a combination business trip/vacation, a retirement savings plan.

Ordinary and Necessary Business Expenses

The key to determining whether an expense is legitimate is found in Section 162 of the tax code, which states that a business expense must be “ordinary and necessary.” Otherwise, it can’t be deducted.

Unfortunately, the tax code doesn’t define either ordinary or necessary. Luckily, in many cases whether a business expense is ordinary and necessary is obvious. For instance, office equipment and supplies used in the business are clearly deductible.

Examples of Ordinary and Necessary Business Expenses

Here are some other ways to determine if an expense is ordinary and necessary:

IRS publications and regulations.

In some cases, such as travel expenses, the IRS provides specific instructions for determining whether or not an expense is ordinary and necessary. This is often done through IRS publications and regulations.

Court decisions.

When there is no guidance on whether an expense is ordinary and necessary, it’s up to the courts to figure it out. Generally, courts agree that ordinary and necessary refers to the purpose for which an expense is made.

For example, renting office space is an ordinary and necessary expense for many businesses. However, the space must actually be used for the business or the expense won’t qualify.

Ordinary has been held by courts to mean “normal, common, and accepted under the circumstances by the business community.”

Necessary has been interpreted to mean “appropriate and helpful.”

Given these broad guidelines, it is not surprising that people have tried to push the envelope on what qualifies as a business expense; and the IRS has pushed back. Sometimes a compromise is reached, and sometimes the issue is thrown into a court’s lap.

What Makes an IRS-Compliant Mileage Log?

admin — Fri, 15 Sep 2017 14:50:16 +0000

If you’re self-employed, tracking mileage is huge because it’s one of your largest tax deductions. Learn the “How-TOO” on the specifics of documentation and record keeping.

In 2016, the standard mileage rate for the cost of operating your vehicle for business use is 54 cents per mile.

The IRS clearly states that when you travel between your place of business, whether that is a home office or an office based elsewhere, you must keep records of all the expenses you have. You can use a log, diary, notebook, app, spreadsheet or any other written record to keep track of your expenses.

Elements of a Standard Mileage Log

When it comes to mileage, many people make the mistake of documenting too little information. The IRS clearly lays out the required elements of a standard mileage log:

Date (including year)
Destination (address of customer or client)
Purpose of trip (name of customer)
Odometer Reading: Start (include the tenth of a mile)
Odometer Reading: Finish (include the tenth of a mile)
Total mileage (include the tenth of a mile)

Also keep any related extra business expenses such as tolls or parking. Make a note next to the mileage entry whether it is parking or toll and attach each of these receipts to your mileage log.

Example of a vehicle mileage log

Considerations for Tracking Mileage

While you might be doing a great job tracking the basic mileage to and from job locations or between an office and a customer location, did you know qualified mileage also includes travel between your office (including a home office) and another office location, such as a brick-and-mortar store?

It also includes travel for business-related errands, such as buying supplies or picking up an order, traveling to and from the airport, driving to temporary job sites (lasting less than one year) and going to and from meetings with clients that include entertainment such as dinner.

You cannot make estimates, which means your miles each day need to be complete, accurate and substantiated. While you are allowed to maintain a handwritten log, they are prone to human errors, such as leaving off the client name or destination address.

If you are audited, the IRS might disallow your entire log due to these innocent mistakes. You also have to delineate between personal and business miles if you use the same vehicle for both purposes.

Other Vehicle Costs You Can Deduct

The first year you put a vehicle in use for your business, you must use the standard mileage rate method of tax deduction. In later years, you can continue to use that rate or use another calculation method, called the actual expenses method. Each has special rules and you should refer to IRS publication 463 for details.

Other eligible vehicle expenses you should keep records for include:

State and local personal property tax statements
License tab fees
Interest on car loans
Sales taxes from the purchase of the vehicle
Casualty or theft losses

Note: Ask your accountant: If I use my vehicle for business more than 50 percent of the time, am I also eligible to make an annual depreciation deduction.

Save as much documentation as possible, including receipts, sales invoices, license tab renewal forms and tax statements. With a product like QuickBooks Self-Employed, you can take a photo of your receipts and attach them to your expenses, along with managing your mileage. This makes for an easy upload during tax time without the hassle of holding onto your receipts all year long.

How to Record Your Mileage

One of the best ways to capture the required IRS mileage information is to use a mileage tracking app. When you’re offline, you should use a printable mileage log that you keep in your vehicle.

By using an automatic tracking tool, you can potentially save thousands in what would have otherwise been lost or forgotten deductions.

If you plan to deduct your mileage on your taxes, you must be organized, consistent and detailed. You don’t want to invalidate your log by missing a piece of information. If you use an app that automatically tracks your mileage, you are more likely to have all the details necessary to make your deduction.

What Home-Based Business Expenses Can I Deduct from IRS Taxes

admin — Fri, 15 Sep 2017 00:29:14 +0000

Home-based Business expenses are the deductions to help reduce and even eliminate federal income taxes. Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit.

Note: If you do not carry on the activity to make a profit, you must report all of the gross income, without deductions. Special limits apply to what expenses for a not-for-profit activity are deductible; for detailed information, refer to Publication 535, Business Expenses.

What Can I Deduct?

To be deductible, a business expense must be both ordinary and necessary.

An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

It is important to separate business expenses from the following expenses:

The expenses used to figure the cost of goods sold,
Capital Expenses, and
Personal Expenses.

Capital Expenses

You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. In general, there are three types of costs you capitalize.

Business start-up costs
Business assets
Improvements

Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.

Personal versus Business Expenses

Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.

For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.

Business Use of Your Home

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.

Business Use of Your Car

If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. Learn some tip and actions to Keeping a mileage log.

Other Types of Business Expenses

Employees’ Pay – You can generally deduct the pay you give your employees for the services they perform for your business.
Retirement Plans – Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees’ retirement.
Rent Expense – Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
Interest – Business interest expense is an amount charged for the use of money you borrowed for business activities.
Taxes – You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
Insurance – Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.

This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.

America Has Two Separate Tax Payer Systems

admin — Sat, 09 Sep 2017 19:50:30 +0000

In America there are two taxpayer systems. Hopefully the following will help to explain the difference between the two tax systems:

Type 1 taxpayer is an employee working for someone getting a regular paycheck, either monthly, bi-monthly, weekly or bi-weekly.
Type 2 taxpayer is a person who owns their own home-based business.

There are far more business tax deductions than personal write-offs

Tax deductions is a primary part of being a business. Whether you run a hair salon out of a brick-and-mortar facility downtown or you operate a small fleet of taxis, you’re immediately eligible for far more tax write-offs as a business owner than those available to individuals.

With personal taxes, you may qualify to deduct unreimbursed employee expenses you incur in your W-2 job. Deducting mortgage interest and student loan interest could also be an option. But the list of personal deductions does not go much further than that.

As a business owner, you’re spending lots of money on ordinary and necessary expenses to keep your venture up and running. More expenditures means more to write off. If you conduct work out of a spare bedroom in your house, you may be able to claim the home office deduction. If you use your personal vehicle for business trips between worksites, the vehicle deduction may be calling your name.

Startup costs of up to $5,000 to get your enterprise rolling are also deductible, along with 50 percent of business-related meals and entertainment and most out-of-pocket medical expenses you incur. Of course, nearly any business expenses you incur within your specific field are generally deductible—everything from computers to paper clips to printer paper.

The key to claiming business deductions is to record each and every one of your expenses. Save receipts and organize them for easy access in the future. The IRS often requires business owners to provide supplemental documentation to prove that they do indeed qualify for the write-offs they are claiming on their income tax returns.

Learn more about the TWO Different Tax Systems.

Tips and Actions to Keeping a Vehicle Mileage Log

admin — Mon, 04 Sep 2017 14:13:54 +0000

Why Keep a Vehicle Mileage Log for Tax Purposes

Many taxpayers overlook this tax deduction, because they think record keeping is too difficult and isn’t worth it.

If you use the same personal vehicle for most of your business use, the IRS has a new program which basically requires you to maintain a a vehicle-use log for ALL uses of your vehicle, for only 90 days. The IRS will accept that time as a snapshot of your driving patters for the full calendar year.

Since 90 days is one-fourth of a year, if you keep a log for “a typical 90-consecutive day period”. This is the wording within the Tax Code. The mileage used for business-use documented in the 90-consecutive day period, may be multiplied by four, to create your annual allowable deductions.

Task to Maintain Vehicle Mile Log

The task of keeping a mileage log is simple and easy. First download a Vehicle Mileage Log Form, make multiple copies and place in a binder. When you get into your vehicle, before you start your engine, start a mile log entry by placing two pieces of information in your log; the date and your starting point. When you get your destination, record your destination the purpose of the trip along the total miles driven.

A couple of tips in keeping your vehicle mileage log:

Always start each month on a new vehicle log page.
For the work effort don’t just track your mileage for 90 days do it for a full year.

The primary reason for starting a new month on a clean or separate page is; What if your 90 days selection is not the largest number of miles traveled within that year. By, keeping the log annually, you can either take the actual years worth of travel miles or hand pick the heaviest miles in any 90 day period. By starting each month on a separate log page you can easily break down this information.

Simply keep a Vehicle Mileage Log in your car and each time you start your engine, start the the mileage log entry.

Note: The destination does not need to be a precise street address. For example, under the heading Destination, you do not need the address of “Office Depot” just use the destination as Office Ddepot. However, we have found that if you travel to locations out of your area, you may want to place the street name and city of the destination for clarification of the location.

What About Personal Miles vs. Business Miles

What about going shopping trips and other personal errands? Often there are ways these miles could become tax-deductible.

Here is a simple but effective example:

You need to go shopping to purchase a graduation present for your niece. The location is a shopping mall with other stores and vendors you use within your business. With a little advance planning, you can make this trip primarily for business. For example, if there is a office supply store in the mall, and you need to get some office supplies, you could go to the mall to pick up your office supplies. While you’re there, get your niece’s gift.

This mileage would be deductible if a business purpose was your primary reason for the trip and shopping was a secondary purpose of your trip. The secondary purpose is not recorded in your vehicle-use log. If there are two purposes for a specific trip, which one is primary reason? The Federal Tax Courts have ruled that you the tax payer gets to make that determination.

In the above example, you could substitute any reasonable and necessary business purpose in place of the office supply store example.

A trip to the mall for only personal reasons produces a 0%t tax deduction. A trip to the mall for a business purpose, produces 100% tax deduction. Placing the two errands within a business trip purpose give you a 100% deduction.

Each time you are about to run a personal errand, stop and ask yourself: is there a business reason you need to run that you could do at the same time and in the same location?

Sometimes the answer will be “no”, sorry you can deduct those miles. But you’d be surprised at how often the answer is “yes”, you can deduct these miles.

How Beneficial is Mileage or Vehicle Expenses

Shannon West — Sun, 03 Sep 2017 20:51:15 +0000

Your vehicle is most likely one of your largest monthly expenses. However, your car also can be one of your largest potential tax-savings. Lets examine a way to legally write-off a large portion of your automobile costs, which represents a major tax-savings opportunity for you; potentially thousands of dollars in legal tax deductions.

If you use your personal vehicles in your home-based business, the deductions for either standard mileage or actual expenses can have significant tax implications. Many taxpayers overlook this tax deduction, because they think record keeping is too difficult and isn’t worth it.

It pays to learn the nuances between standard mileage or actual expenses deductions.

Questions about Standard Mileage and Vehicle Expenses

The deduction for using vehicles in your business can sometimes be significant, so it’s important to make the following decisions:

Is it better to use the standard mileage rate as your deduction or the actual expenses incurred for a vehicle used for this business?
What is the best way to track mileage use?
What is the best way to track vehicle expenses

Keep Good Records

The IRS is very fussy about writing off the cost of vehicles, so if you plan to take a vehicle deduction it’s essential to keep a detailed log of your business miles and other expenses if you want to write them off, too.

We suggest that you pick up a vehicle expense log at an office supply or stationary store and keep it in your car.

One of the best way to track mileage is the following: Simply keep a Vehicle Mileage Log in your car and each time you start the engine answer four questions:

What day is it? ( the Date)
Where am I going? (the Destination)
Why am I going there? (the Primary Purpose)
How far away is it? (the Miles traveled)

Standard Mileage Rate versus Actual Expenses

To understand whether to use the standard mileage rate or actual costs is a numbers game.

Generally, the more economical the vehicle is to operate, the more likely it is that the standard mileage rate will give you the bigger deduction.

Conversely, the higher the operating costs, e.g., gas, repairs, tires, etc. the more beneficial the actual cost method is likely to be.

Understanding the Standard mileage rate method

The IRS allows employees and self-employed individuals to use a standard mileage rate, which for 2016 business driving is 54 cents per mile.
To determine the number of miles driven for business you need two numbers for each business vehicle:

The total number of miles driven during the year
The total number of miles driven just for business

Tracking your total mileage for the year is easy. Write down the odometer reading on the day that you start using a vehicle for business and on the day the year ends. Business miles are the number of miles actually driven for business, for example, to visit a customer or meet a client.

Remember that any miles driven to the bank, office supply store, computer store, to meet with your accountant or to meet with your lawyer on business matters also count as part of your mileage deduction.

Some travel is not considered business-related:

Driving from your home to your workplace and back is commuting. It’s not deductible on either your business or your individual return.
If you stop at the store on the way home from a business trip, the remaining miles from the store to home are considered personal mileage, so you can’t include them.

Understanding the Actual vehicle expenses method

You can deduct interest on an auto loan, registration and property tax fees, and parking and tolls in addition to the standard mileage rate deduction, as long as you can prove that they are business expenses. Here’s a list of auto-related expenses you might incur.

Gas and oil
Maintenance and repairs
Tires
Registration fees and taxes*
Licenses
Vehicle loan interest*
Insurance
Rental or lease payments
Depreciation
Garage rent
Tolls and parking fees*

*Also deductible if you choose the standard mileage method.

The percentage of time (based on miles) that the vehicle is used for business determines the deductible portion of these expenses.

Calculating standard mileage rate or the actual expenses

Here’s how the math works:

From your mileage log – Your total mileage was 18,000 and documented business miles were 16,202. The business-use percentage is 90% (16,202 divided by 18,000).

For actual expenses – Let’s say your gas, oil and repairs came to $3,000 for the year. Fees and taxes were $500. Loan interest and insurance were $1,500. If it’s an old car, the is no depreciation write-off. Your total “actual” expenses were $5,000. If you use the actual expenses method, you could deduct $4500 (90% of $5,000).

For the standard mileage – in 2016 the mileage rate was $0.54 per mile. Taking your business mileage from your mileage log (16,202), multiply the business miles X the mileage rate which equals $8,749 (16,202 x .54). In this case, the standard mileage method gives you the bigger tax benefit.

The business-use percentage usually varies from year to year. Operating expenses are annual expenses and do not affect subsequent years.

Mileage or Vehicle Expenses Conclusion

Car expenses and mileage is much more detailed than we can cover in this article. I suggest that when you become a home-based business you contact an accountant or financial adviser to get a detailed plan on how the best is for you to record your expenses.

Note: As you can see the standard mileage or actual vehicle expense is a large dollar amount that will go against your tax liability.

More information on Tax Advantages with a Home-based Business

Home Office Deductions and the Requirements

Shannon West — Sun, 03 Sep 2017 00:13:27 +0000

As a home based business owner, if you use a portion of your home for business, you might be able to deduct the associated costs.

A home office deduction requires that you use your home office as the primary office for your business. But even then, the Internal Revenue Service has certain requirements a taxpayer must meet.

General Home Office Requirements

First, your home office area must be used regularly and exclusively for your business needs.

Regular means just that. You can’t set up a computer in your den, sporadically type invoices and claim that room as your home office.

Exclusive is self-explanatory, too, but the IRS has provided some wiggle room here. The area of your home can be a room or other separately identifiable space. The space, says the IRS, does not need to be physically marked off from the rest of the room.

Regular and Exclusive Use

You must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room.

This change apparently was prompted by a tax court ruling a few years ago that allowed a work-from-home taxpayer to claim a deduction for proportionate use of some home space. But the exclusivity requirement is the same. Regardless of what specific space is your home office, you must use that room or area just for work.

A separate, detached structure such as a garage or guesthouse that is used regularly and exclusively for business also may qualify as a home office.

Second, the business part of your home must be either your principal place of business or where you meet or deal with patients, clients or customers in the normal course of your business.

Principal Place of Your Business

You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction.

For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business.

You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

A few years ago, the IRS also broadened the business activities that can be considered in determining whether a home office is a taxpayer’s principal place of business. Now, if a home office is used exclusively and regularly for the administrative or management activities of your business, it also qualifies.

Such things as billing operations, keeping your books and records, ordering supplies or setting up appointments qualify as administrative duties. Be careful here. The IRS cautions that your home location must be the only place where you can fulfill these responsibilities.

What are Direct, In-Direct and Unrelated Cost

There are three types of expenses you may incur while maintaining a home and home office; direct, indirect, and unrelated.

What is a Direct Cost

Direct expenses are those that directly impact the office portion of your home. For example, repairing the drywall in your office space or installing carpet. These expenses relate solely to the office portion of your home and are deductible in full.

Direct costs include, for example, new lighting for your home office. Indirect costs are the percentage of your home’s utilities, repairs, insurance and the like that are attributable to your home office.

What is an In-Direct Cost

Indirect expenses impact the whole home. While they benefit the home office as it is part of the home, they do not correspond directly to maintaining a home office. Getting a new roof on the house, for example, would prevent leaks in the office, but also prevent leaks in the personal areas of the home. These indirect expenses must be divided between the business and personal percentages of your home. The business percentage of these expenses is deductible.

Indirect costs also include a portion of your mortgage interest and property taxes, the balance of which is deductible on Schedule A.

What are Unrelated Cost

Unrelated cost are those that you incur as a homeowner but that do not relate to maintaining a home office. Examples would be lawn care or constructing a carport. These cost do not impact the home office and are not deductible.

2 Methods for Using Home Office deductions

If you work from home, you may be able to write off the home office on your taxes.
You have two options for deducting your home office:

Original home office deduction: Fill out the 43-line Form 8829 to claim a deduction. This options uses the direct and in-direct cost.
Simplified home office deduction: Fill out a six-line page and deduct up to $1,500.

Which home office deduction method should you use? It depends on your situation.

How to use the regular or original home office deduction method

Under the original home office deduction method, which the IRS calls the regular option, you keep track of direct and indirect home-related costs that affect your home office.
Taxpayers using the regular method (required for tax years 2012 and prior), instead of the optional method, must determine the actual expenses of their home office. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.

Generally, when using the regular method, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

Calculating the Business Percentage
The drawing above is an example of the type of diagram you would save with your tax information in case of an audit. The diagram shows the square footage of each room and the rom you use for your home office.

The deduction is dependent on the “business percentage” of your home. This is the ratio of the part of your home used for business purposes to your entire home. This can be calculated using any reasonable method, the most common methods being:

Dividing the square footage of the business portion of your home by the total square footage of your home.
Dividing the number of rooms used for business by the total number of rooms in your home (assuming all rooms are approximately the same size).

With the regular option, these direct and indirect costs are entered on Form 8829 with your other expenses for business use of your home. The final calculation on that document then is transferred to your Schedule C and filed with your Form 1040 to report your business’ profit or loss.

How to use the simplified home office deduction

If you use the simplified home office deduction method, there’s no need for Form 8829. Instead, you use the worksheet in the Schedule C instructions. This six-line page allows you to deduct the square footage of your home office at $5 per square foot up to a maximum $1,500.

If your work space is less than the maximum 300-square-foot area covered under the simplified method, your deduction will be less. Say you use a den or spare bedroom at home as your home office and it measures 18-by-15 feet for a total of 270 square feet. Multiply that by $5 for a total simplified home office tax deduction of $1,350.

Since your home’s mortgage interest and property taxes are not used proportionally for the simplified home office deduction, they are fully deductible as usual on your Schedule A. More appealing for many taxpayers: There is no longer the need to dig out your home records and do the math for the home office deduction.

You do, however, lose the value of home office depreciation under the simplified method. For some taxpayers, that could be a substantial amount.

Conclusion

Remember to always check with your accountant before you choose which type of method to use. There are several pro’s and con’s that go with each method depending on your home ownership and financial situation. Your account for financial adviser will help you making the right choices.

Tax Advantage Tips for Home-based Business

Shannon West — Sat, 02 Sep 2017 11:42:47 +0000

If you are one of the more than 38 million (according to the U.S. Census) home-based businesses in the United States, you’ll be happy to know that special tax rules apply to you. Here’s how you can make the most of your home-based business tax status.

Deduct some of your personal housing costs

If you meet one of two tests in the tax law, you can deduct a portion of your personal expenses of operating from your home as a business expense. This includes your rent if you lease or your mortgage interest and real estate taxes if you own your home, as well as utilities, insurance, repairs and other costs.

To be a deductible home office, Your home must be

your principal place of business (or a place where you do administrative chores, such as scheduling and record keeping, and you have no other fixed business location) or
a place to meet or deal with customers, clients and patients on a regular basis (telephoning customers from home isn’t enough).

You have to use the space regularly and exclusively for business (except in two special situations). This means you can’t use the kitchen table as your desk by day and feed your family there at night. You don’t need to use an entire room or even have a physical partition to denote the portion of a room used for business.

Generally, you deduct a portion of the expenses of a home. For example, if your home is 3,000 square feet and you use a 300-square-foot room as your office, then 10 percent of each expense of the home becomes part of the home-office deduction. You can add to this any direct expenses for the office, such as painting it.

Tip: It’s helpful to take a photo of your office and keep it with your tax records in case the IRS questions your setup.

Deduct traveling costs from your doorstep

If you use your car or truck to go from home to a business location, your mileage from home and back becomes a tax-deductible expense once you establish your home as your place of business. Business driving can include such activities as driving to:

Customers or Meetings
Vendors or Suppliers
The bank to deposit a fee
An office supply company to purchase toner for your printer
or any activity pertaining to your business

Note: If you have a full time job where you geta regular paycheck, your commute from home to work and from work to home is not deductible. But traveling to and from a client’s location is deductible, see the tips on mileage tracking.

Mileage

The standard method in 2016 it is 55.9 cents per business mile plus tolls and parking.
The actual method is to add up all automobile expenses; including gas, repairs, oil change, car insurance, car washes, etc. – and then multiply it by your business percentage (business miles/total miles for the year). Your commute from home to work is not deductible. But traveling to and from a client’s location is deductible.

Tip: As with any use of a vehicle, keep a record of your business driving as required by the tax law. Learn the “How TOO” track mileage log”.

Deduct cost of computers and office equipment

Usually, if you use a computer for both personal and business purposes, you have to track business usage because first-year expensing (the Sec. 179 deduction) and accelerated depreciation is allowed for the cost of “listed property” only if business usage exceeds 50 percent of total usage — a computer is listed property. But once you establish a home office, you don’t have to keep a log because a computer used in a regular business establishment (the home office) is not considered listed property.

For example, if you buy a computer for your home office in 2016 for, say, $1,500, you may qualify to deduct the full cost as a first-year expense deduction because the computer is used in a regular business establishment.

“How TOO” Introduce a Home-Based Business Opportunity Online

Shannon West — Fri, 25 Aug 2017 18:19:58 +0000

What Do You Say in an Introduction

If a home-based business opportunity was introduced to you with this introduction; “This is a great product, you can make lots of money and you can get your friend and family involved so they can also benefit”.

If you like this introduction is appealing to you, this article is not for you. We at HBB, introduce an opportunity in a special way. We present a home-based business opportunity by introducing tax benefits to reduce or negate income taxes. The IRS says and gives you in their tax code exactly “How TOO” do this.

The most important fact to remember when doing automated online marketing is to generate traffic. One of the best ways to generate traffic or find your prospects is online. You ask why automate, the answer is simple.

Before we start with the Automated Process, Let me explain the non-automated process.

Non-Automated Recruiting Process

In the non-automated process, you are constantly carrying around fryers and presentation materials. Plus, you are constantly trying to find a place to meet and the hardest part is matching a schedule for you and your contact to agree on.

Here are the steps to the non-automated process.

first to get a prospect you must find and contact them,
Set up a time and place to meet,
Introduce them to your program, give the presentation,
Listen to the No’s,

Two quick question:

Do you have that much time to spend on a home-based business?
How many contacts can you personally meet and talk to in one day, while working the full time job, doing personal and family things along with sleeping and eating. The answer is “a few”.

A Couple of Non-Automated Process side notes; your contact will most likely be within a specific area around your physical location and a large majority of contact will be friends and family.

Automated-Recruiting Process

In the Automated-Recruiting process, your time is spent in valuable ways; such as more family and personal time, less time trying to find contacts, trying to arrange a schedule or place to meet and most of all you don’t have to go to friends and family.

With Marketing Automation, it’s a totally different program. When you see an (AP) behind a listed item meaning this is an Automated Process and you will not being doing this step, the automated process will.

Items within the Automated-Process you don’t understand or don’t know how to do will be taught to you.

First to start the recruiting process, you have to post to your social media account. (We provide the content, all you do is copy and paste). Your efforts will help in the following ways:

Your prospect will learn about you and of what you do through your social media and the internet (AP)
The prospect will learn at their own time and pace, you don’t have to set up a time or place to meet (AP)
Your prospect will be introduced to your program through automated web sites (AP)
You don’t have hear people say NO, they just go away and you only talk to contact that are interested. (AP)

Action or task you will have to preform:

You will have to talk to your contacts when they want to become a customer.
Help them do the same thing you do.

Summary

Remember earlier when we ask how many contact can you talk to in one day. Well lets ask that question again about the Automated-Recruiting Process. The answer is “many”. I have experienced other team members get as many as 15 contacts a day to initiate a first contact to get more information.

No matter how long it takes for your contact to contact you, you are working on other continued steps to build your business, work with toher contacts, and spend more time with family and personal time.

Let me ask you; Do you want to use the non-automated process or the Automated Process.

What is a Prospect Magnet

Shannon West — Sat, 12 Aug 2017 14:29:42 +0000

What is a Prospect Magnet

Welcome to Prospect Magnet Page. This page will describe a Prospect Magnet, its features how it should be used.

First, what is a lead magnet?
Simply put it is a CTA or Call to Action that gets a prospect to give you their contact information. Getting a prospect to give you contact information is a key step in building a relationship.

Second, What are the features of the Lead Magnet
When your prospect uses the lead magnet a data base of information is record foe you to use to contact them. A specialized program is provided for you can use on your desktop, laptop, tablet or smart phone allows you to view at anytime who has contact you. The displayed information is:

Learn More About 'HOW TOO':
To leverage the value of a Splash Page

Collect Data focused on something very specific
Get the prospect to give a specific time to call
the Lead Magnet offers a soft sell or simple contact
Preload the LMag with a specic subject prompt

Third, How to use the Lead Magnet
Place a statement or comment that causes intrigue with your prospect, let them fill in the form, This information gives you an email, telephone number and a time to call them back.

Now it is your responsibility to check the Lead Mag list every day or twice a day to get the info to call them back.

First Name
Last Name
Email
Telephone
Time to Call
Please contact me reguarding the information found in this Request