Here’s Why Uncle Sam Wants You To Start A Business!

(Reprinted from article written by Sharon Lechter, CPA)

A lot has been said about the many tax advantages of starting your own business. Let’s start with the tax incentives. It’s no secret to anyone that the tax laws are written to promote business ownership. So what do what the rich do. Start your own business and take advantage of the favorable tax advantages that come with owning a business.

Build First, Pay Taxes Last

The difference between the employees and the business owner is that the employee pays taxes FIRST on what they earn and then get to live on whatever is left over. The business owner spends their earnings to build their business FIRST and then pays taxes on what is left. The business owner will always pay less tax than the employee simply because they can reduce the income amount they have to pay tax on. This enable the business owner to grow their business faster and for the business to generate investment dollars quicker.

That is also why there is such an advantage in starting a direct selling business versus a traditional business from scratch. You can immediately begin earning, instead of spending, the time and money to set up the back office administration, product development, advertising, and other functions that are often necessary when you begin a new business.

Tax Advantages of a Home-Based Business

To take advantage of these deductions, the tax code states that these expenses need to be only “ordinary and necessary” and that your business needs to be one in which you are endeavoring to make a profit. Here are some of the other business deductions you may be able to take advantage of:

·         Home office expenses (repair, maintenance, property taxes)

·         Business equipment (computers, cell phones)

·         Office supplies

·         Internet and telephone services

·         Software and subscriptions

·         Mileage and other auto expenses

·         Travel, meals, and entertainment

Proper Documentation a Must

Don’t be afraid to take advantage of these deductions. As long as your expenses follow the tax code guidelines and you retain proper documentation to back-up the expenses, you will be protected in the rare case of an audit.

G. L. Giddings, Director

GLG and Associates, LLP

The POWER Group Organization Team

http://ibourl.com/17hk 

Office: (502) 209-TEAM {8326}