Because the IRS knows that in any type of business "it TAKES money to MAKE money", the dollars you SPEND to make taxable income may be used as a deduction to REDUCE THAT TAXABLE income!

It is very important that you begin your business keeping accurate records of the expenditures you make to get and keep your business running. Begin thinking in terms of ALL dollars you spend. Did that dollar contribute to making your business better? Did it reach a larger audience for your business? Was it necessary to attract people to buy your product?

One common deduction that home business owners miss is the deduction for the use of their home office or other portion of their home used for the business. While normal utility bills, property insurance, and depreciation are NOT deductible for the average person, home business owners may use a portion of these expenses as a write off against income earned in their business.

Another deduction missed is the use of the family vehicle. This could be written off as a percentage of the actual expenses, i.e., gas and oil, repairs and maintenance, interest paid on vehicle loans, insurance, tolls and parking. Or it could be written off at the standard mileage rate of 44.5 cents per mile for all miles used for business purposes.

Do you print flyers to put in mail boxes to advertise your service or product? The cost of printing those flyers, as well as the miles driven to deliver them are items to deduct from your business earnings! Did you pay your child to deliver them on his/her bike? Pay him/her and deduct it from your taxable income. No Social Security Tax and no medicare taxes need to be withheld from your child that you pay until they reach the age of 18!

Remember, the IRS knows that expenses are a necessary part of any business. Make sure you don’t miss reporting the expenses you are entitled to use!

In the next mini-course, we will be looking at the employee benefits that can be paid for out of your business – those are benefits that are paid to/for you since you are the employee of your home business and you can do it tax free!