Make Your Money Work For You?

March 30, 2009 by  Filed under: Taxes 

Have you always wanted to work from home in you own home based business but thought you could not afford it? Do you feel that it is a dream beyond reach for you? I will share with you a few reason why you can’t afford not to own you own home based business. Did you know that owning your own home based business and running it actively and consistently for a few hours a week, have a profit intent, and keeping good records will enable you to enjoy additional tax refunds that people who do not have a home based business cannot enjoy?

Say you decide to drop off some brochures for your business across town along with other personal errands the miles driven are a business expense. Don’t forget the use of magnets to advertise your business placed on your car when you are driving around town. Your car is being used as a business expense. There are many people who don’t take the mileage deduction because they feel they don’t have time to write it down and they are missing out. Did you know that you only have to keep track of three months of business mileage and you will still get credit for the whole year?

The only information that is required when you are doing your record keeping is date, destination, primary purpose of trip, and number of miles traveled that’s it. How simple is that? You just have to remember to do it each time you go out. Keep yourself a log to record your entries in your glove box or arm rest so you can always have it handy when you go out. Place a sticky note on your steering wheel or in plan sight so that you will remember to jot your mileage down until it becomes a habit and you will do it without thinking.

You have two options for determining amount of deductions. The first is Actual Operating Costs method where the total of all documented vehicle operating costs, anything you have to do to the car to keep the car in running order, can be deducted. You can only use this method if you claim miles on just one vehicle. The second option is Standard Mileage Rate Method where you will get .55 cents per mile times number of business-miles driven. The .55 cent rate is current for 2009. Using this method depreciation and all operating costs are included in the standard mileage rate figure. Once you have your information recorded then you only have to decide which methods gives you the greater refund.

This is just a sample of the tax deductions you are entitled to and there are many more for you to take advantage of. Find something you enjoy doing and let nothing hold you back you have everything to gain. Now is the time for you to take a second look at owning your own home based business and the advantages it has to offer you.

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