Finance: Your Best Tax Strategy - Start a Side-Business

Your Best Tax Strategy - Start a Side-Business

Written by Doris Dobkins

I'm busy enough! I don't have time to start a business!

What good would it do me anyway?

Well, having your own business is one of repparttar best ways to save money on taxes and considering that many of you just finished paying Uncle Sam all your wages from January to May 2000, I thought you might be interested in this topic.

Consider this example.

If you work for someone else (as in a JOB), your finances flow somewhat like this: 1. Earn repparttar 112804 money 2. Pay Taxes 3. Spend repparttar 112805 money

When you have your own business or corporation, you: 1. Earn repparttar 112806 money 2. Spend repparttar 112807 money 3. Pay Taxes on what's left

Do you see repparttar 112808 difference here? I'm going to recommend a book for you to read if you want to understand this process better. It is called "Rich Dad Poor Dad" by Robert Kiyosaki. It is a great book and I highly recommend it. Now, back to our article.

When starting a business, The IRS requires only that you keep good records, conduct your affairs in a business-like manner and show that you are trying to make a profit. There are also some new tax laws that are even more in favor of those "home offices" than in previous years.

Old Tax Law: If your home office is your principal place of business, then you could deduct home office expenses.

New Tax Law: If you have a space at home that you use "regularly and exclusively for administrative or management activities" in your business, you may now qualify for a home office deduction.

Previously, if you worked outside of your home, you weren't allowed to deduct your home office because it isn't repparttar 112809 "primary" place of business. Now you can. For more information, see repparttar 112810 Internal Revenue Service publication #587 on repparttar 112811 IRS Web site, http://www.irs.treas.gov

There are a lot of deductions associated with home offices. Some things that might be deductible include a percentage of your mortgage interest, property taxes, rent, utilities, insurance, garbage collection, second phone line, cleaning fees, magazines/newspapers, office supplies and equipment.

If your home is repparttar 112812 principal place of business, you are allowed to deduct repparttar 112813 mileage for all your business trips. You can count repparttar 112814 mileage from your home to repparttar 112815 place of business (i.e. post office, bank, client site) and repparttar 112816 return trip. The IRS requires that you keep good records of your driving. Keeping a little pocket calendar in your car or handbag is an easy way to track mileage on a daily basis. At 32.5-cents a mile, every 307 miles of driving will earn you a $100 deduction. This can add up very quickly over repparttar 112817 course of a year. I know it does for me.

Financing Your Business Venture

Written by Mark Askew

Many small businesses were born during repparttar

recession of 2001. One key reason is that during a recession period overhead costs tend to be lower. Still repparttar 112803

time comes when a business needs to ascend to higher ground and reach a larger group of consumers. This presents repparttar 112804

challenge of finding money to finance your marketing plan. As with any major financing transaction one needs to be prepared with repparttar 112805

appropriate documentation at hand as well knowing repparttar 112806

methods of finding repparttar 112807

best bargain small business loans available. So where do you start?

FIRST STEPS IN SHOPPING FOR BARGAIN LOANS.

1. Calculate what you can afford

Remember to include rates, points and fees.

2.If purchasing a home include insurance and taxes.

3. Get your credit report

4. Put your financial papers in order

These would include:

Bank statements

Mortgage papers

Insurance papers

Car loan papers

Tax ID

Business expense receipts

Taxes overdue

Other loan documentation

Credit reports

Other out-standing debt.

FINDING OUT HOW MUCH YOU CAN TO BORROW

4. Estimate your monthly/annual income

5. subtract income tax payments due

6. Calculate your monthly expenses and subtract this from repparttar 112808 above

8. List any outstanding debt and subtract this from repparttar 112809 above figure

7. Now figure out your net worth by calculating all assets.

Include investments, auto, home, CD's bonds stock estates etc.

Line 7 is your true net worth.

You would do best to borrow no more than 25% of your net worth.

Line 6 is your financing income. Income you can use for paying on a business loan and as well as other expenses. It's best to use no more than 50% of this and put repparttar 112810 rest aside for investment and savings.

Now adjust repparttar 112811 amount you wish to borrow based on true net worth and include any outstanding debt you wish to satisfy. You are now better prepared to ascertain what is needed and what you can afford to request.

FINDING BARGAINS ONLINE

Thanks to repparttar 112812 Internet you can become a part of a highly competitive marketplace of lenders competing for your business in a structured bidding system. One such resource is at http://www.mortgageloansearch.net. Consumers shopping for repparttar 112813 lowest rates and attractive loan programs simply complete one application that is submitted securely to several lenders at one time. Lending networks like Loanweb.com offers low rate shopping in a highly competitive bid-for-your-business marketplace.

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