Get a $5000 Raise This Year (Or More!) With The Tax Benefits of a Home-Based Business By Roger Essen and Mike Keeney

When it comes to income taxes, there's good news, and there's bad news. You might think that anything regarding taxes can only be bad news. Surprise! There is a great deal of good news, in two areas. First, major personal tax savings; and second, building your business with the help of the U.S. Congress.

Your Tax Savings as a Business Owner

If you are a sole proprietor business owner, you have more business tax deductions available to you than any other legal entity. You may qualify for some or all of more than 150 potential deductions. You do not even need to be profitable in your business in order to get the deductions!

Because the tax code seems endless (and the fear of possible mistakes paralyzing), these tax deductions lurk as "tax secrets" to the average business owner. Even the rare business owner who does know about these tax "secrets" usually doesn't know how to qualify for them or properly document them.

Here are some "Did you know?" facts that represent major tax deductions most home business owners are missing out on.

SECTION 105 OF IRS CODE

This section of code allows 100 percent medical reimbursement on all medical expenses (co-pays, insurance premiums, dental, optical, etc.). Average benefit is $2500 per year for those who qualify--that's more than $200 per month!

HOME OFFICE DEDUCTION

Average benefit is $2400 per year--another $200 per month you get to pocket.

HIRING YOUR CHILDREN

Home business owners can pay their qualifying children up to $4700 (that's the 2002 figure) each in wages--both income and social security tax free!

SECTION 179 OF IRS CODE

This section allows a business owner to take the full deductible amount on capital purchases--up to $25,000 in the first year. This category includes: autos, office furniture and equipment.

VACATION / BUSINESS TRIPS

Combine all vacations with legitimate business activities. Thus, all or most of the cost of each trip can become tax-deductible as a business expense.

We're already looking at in-your-hand savings of hundreds of dollars per month--and we've looked at only five of the 157 or more potential business deductions.

Most of the above expenses are currently household expenses. With a home business, these expenses can be converted into business tax deductions, giving you an additional $20,000 to $40,000 in tax write-offs--that's $5000 to $10,000 extra in-your-pocket cash!

All of these deductions and many more are available to you if you qualify. The critical requirement is that every deduction must be proven with a 100 percent compliant (per the IRS) tax documentation system. Receipts, records and mileage logs are in addition to this documentation.

Business-Building with "The Tax Proposition"

The concept is very simple: the average working American can keep an additional $5000 or more in taxes from his current paycheck if he sets up a home business.

This is possible if the business is pursued on a part- or full-time basis, profitable or not. What's more, the tax savings become available immediately, the moment the taxpayer sets up his or her home business.

Could the average family use an additional $400 to $500 a month? Of course they could! It not only pays for the startup and monthly costs of building the business, but there's also enough left over to knock down an existing bill or two. This is instant gratification!

In fact, we suggest that you use tax savings as a marketing approach on all the underpaid and overtaxed workers that you meet. With those kinds of immediate savings, how could anyone afford not to start a home-based business immediately?