| You ask, "Okay, I'm starting a small homebased | | | | The barber, your golfing partners, beautician, people |
| business, not a huge million dollar International | | | | you meet in the store or casually just about |
| Conglomerate! But should I incorporate or keep it a | | | | anywhere? All you have to do is talk to people, share |
| proprietorship?" Actually, there are arguments in | | | | your information and you have succeeded. You will |
| favor of either decision. This argument will be in favor | | | | be surprised, also, by how many will want to join |
| of the proprietorship. | | | | you? But you must keep records of these contacts. |
| The first thing is that you need to know there is a | | | | The same goes for your gasoline, insurance, |
| totally different set of laws, regulations and tax law | | | | depreciation and repairs and maintenance write-offs. |
| that governs proprietorships and corporations. And | | | | You must keep accurate records of mileage. Your |
| for the small business entrepreneur the tax | | | | start mileage, destination(s), people contacted or |
| advantages offered during the first 5 years are | | | | business conducted, and finish mileage. Then, at the |
| enormous. After 5 years you are expected to begin | | | | end of the year, you need to compute what |
| showing a profit but this is not necessarily "written in | | | | percentage of your automobile use (based upon |
| stone". Let's take a closer look at some of the | | | | business and total mileage) was business. That is the |
| advantages of a proprietorship. | | | | percentage of total automobile expenses you are |
| If I were to show you how a one-time $439 USD | | | | able to write off. |
| investment could gain you from $1000 to $2500 in | | | | For the telephone you have a different situation |
| tax refunds and write offs per year would you be | | | | altogether. You must get a business line. This can be |
| interested in learning more? Okay, here goes. | | | | accomplished one of two ways. Either by a cell |
| If you are a blue or white collar worker, a doctor, | | | | phone or by a second phone line installed. There are |
| lawyer or other professional, can you write off on | | | | several arguments for both but the most telling one |
| your taxes the gas and other travel and parking | | | | is the convenience of the cell phone. With a separate |
| expenses you accumulate driving to and from work? | | | | "business phone" you are able to write off the entire |
| Your lunch expenses? Your home office? Travel and | | | | expense. |
| vacations? Any part of your household utilities | | | | But with the cell phone you must keep track of all |
| expenses? | | | | personal calls. The advantage of the cell phone is that |
| The answer is NO - you cannot write these | | | | you have it with you and can advise your clients that |
| expenses off your income tax. | | | | you are on the way, running late because, etc. And |
| If you start a business, a proprietorship, working out | | | | keep in touch with your home base while you are |
| of your home, call it "your name consulting" or | | | | out and pick up any messages which may have been |
| whatever seems to fit best, you are now able to | | | | left at your home number. |
| write off all of the following: | | | | This applies, also, to your home. You are allowed to |
| Automobile mileage | | | | write off all home expenses in the amount that your |
| Gasoline | | | | business office at home is a percentage of your total |
| Other car maintenance | | | | home space. So if your home is 2000 sq. ft., and |
| % of automobile depreciation* | | | | your office is 200 sq. ft., you may write off 10 |
| Home office (as a % of your home) | | | | percent of your total household expenses. This |
| % of home utilities expenses | | | | includes rent or mortgage payment and all utilities. |
| & of your home telephone bill | | | | If you keep your meticulous records, take your |
| Entertainment expenses | | | | "working vacation" every year and "do your business" |
| Vacation expenses | | | | all the time, you stand to save from $1000 to $2500 |
| Meals | | | | on your income taxes every year, for at least the |
| *100% of a Leased Car | | | | first 5 years. |
| And more, these are just the bigger ones. | | | | If you can start your business for under $1000, and |
| There are, of course, conditions. You cannot go on | | | | keep your business going for under $1000 a year, |
| vacation and simply "write off" all of your vacation | | | | you are in a plus situation where your business is |
| expenses. You must "share the information" about | | | | actually making you a profit --- even though it is |
| your product or service with others while you are on | | | | technically a loss --- every year for at least the first |
| vacation --- more than just "passing out business | | | | five years. |
| cards --- and you must also keep records of every | | | | Copyright 2004 by Windy Dawn Marketing and |
| contact you make. This will also help you with | | | | Windy Windblad. This article may be freely copied |
| follow-ups. | | | | and used on other web sites only if it is copied |
| These contacts, with whom you are sharing the | | | | complete with all links and text intact and unchanged |
| details of your business service or product, are the | | | | except for minor improvements such as misspellings |
| contacts that will validate your write off. You should | | | | and typos. |
| have at least two a day while on vacation. Who? | | | | |