Can you take donuts, meals or vacations as tax deductions?
How about a trip to the mall or a meal at your favorite restaurant?
How about writing off toys, electronics or other personal items?
Payments to your kids or other family members?!
If you do it right...YES...you can write these off!
... and see your taxes go down drastically (or see your tax refund get much bigger). Tax savvy folks work the tax code to gain maximum tax benefits...and you should too! (Hint: a home business helps!!)
You see, properly and legally deducting something isn't just what you deduct...it is also about HOW you do it. It is more than just keeping a receipt...it is about understanding some very important tax principles and more.
The great thing about these deductions (and many more) is that the IRS will help you do it! This is what I want you to keep in mind...you are not taking my word for it...
You will be able to take these deductions with the full blessings and guidance of the IRS!
This course takes it a step beyond just keeping thousands more in your pocket...it is also about how to use your tax savings to build long-term wealth!
The bottom line is that if you manage your taxes...you build wealth and future financial independence.
(and yes...a tax class can be tax-deductible!)
It is indeed safe and easy to take tax deductions...but don't take my word for it! In the first video, I give you a brief guided tour to the important areas of the IRS's website (www.irs.gov) that will give you the guidance you need to take your deductions confidently and understand that virtually everything mentioned in this course does indeed come straight from the IRS through their publicly available reports, forms and publications.
One of the most important terms for you to understand to guide your year-round tax savings strategy is one that you will have difficulty finding in the tax laws...Context! It helps you understand above and beyond the common response you will get to the question "Is this expense tax-deductible?" which is typically "It depends". Please make sure you peruse the accompanying publication (# 535) on business expenses straight from the IRS.
Knowing how to keep good records is essential and the IRS tells you in advance what records you should maintain so you are in compliance. This screencast gives a brief tour regarding this matter (Pub. 583). Other publications get more specific. Meal and Entertainment expenses, for example, are covered in greater detail in Pub. 463.
A tax deduction has the power to save you on multiple taxes so that you can truly accumulate tax benefits. This screencast lays out the case for how cumulative tax deductions can save you significantly on your taxes.
Before you actually start a business, you may encounter costs for researching and related expenses in your "pre-launch". Given that, speak to your tax person about something called "Stat-up amortization". This is usually covered in the same publication as depreciation (Pub. 946) and reported on Form 4562.
We all eat everyday...meals are part of life but usually they can't be deducted. However, business meals are deductible (with some limits) and the more meals you can legitimately deduct...the better for you tax-wise. More details are in Pub. 463.
Personal trips (such as vacations) are usually not deductible. Business trips, however, usually are. Find out how to deduct business-related travel expenses (even if you enjoyed the trip!). More details are in Pub. 463.
Usually, payments to kids (such as an allowance) is not a deductible expense. But what if they are doing legitimate work for legitimate compensation in your business (even at home?)...then yes! The IRS provides guidelines on how to do it right and this screencast shows you where that information is at their site.
Business-related auto expenses are definitely deductible for your business and you should check out how to do it with this screencast. More details on auto expenses are provided in Pub. 463.
Yes...you can deduct business-related entertainment and gift expense but you must do it right. Full details are provided in Pub. 463 and this screencast will give you the tour...
Can you deduct a cruise?! Believe it or not...a cruise can be deducted if it is business-related. The IRS provides guidelines on how to do it right in Pub. 463 and this screencast helps you find that info.
The home office expense is a powerful deduction and it can be worth thousands...but you need to do it right and also get very familiar with Pub. 587 which provides the critical details.
Business Expenses can be deducted readily in a given period (such as a tax year) but assets are treated differently...they are usually "depreciated" which is like deducting it on an "installment plan" by deducting a portion each year over multiple years. Depreciation is covered in Pub. 946.
If you are low-income (and a few other requirements), you may qualify for the Earned Income Tax Credit which is a refundable tax credit. It is a way that many low-income folks (even those that run a business) can get money from the IRS...even if it is not money from what you paid (federal taxes). Check it out and this screencast will tell you where to get more details (along with the IRS publication about it).
Don't just get back more money due to your tax deductions strategy...use the money to build long-term wealth! This screencast will give you an idea about how your annual tax deductions could turn into six-figures added to your future nest egg.
As you are building your long-term wealth (derived partly from your annual tax savings), consider gaining even more tax advantages by utilizing some great tax-advantaged tax plans approved by the IRS. This screencast will give you a brief tour of the publication that provides the relevant details.
I hope this tax course has whetted your appetite and given you encouragement to explore the tremendous opportunities to increase your net income from tax deductions and strategies you can implement. I think that a Home business is a important part of your overall wealth-building strategy and that includes tax benefits too! At this point it is time to review key videos and IRS publications and get that discussion going with your tax person!
Paul is an author, CFP and national seminar leader. He is the author of...
* High-Level Investing For Dummies
* Stock Investing For Dummies
* Zero-Cost Marketing
* Micro-Entrepreneurship For Dummies
* Precious Metals Investing For Dummies
* The Job Hunter's Encyclopedia
He has been teaching nationally about investing, tax and business start-up issues since 1983...over 2,500 seminars and workshops!
He calls himself a "raving capitalist" because he believes that everyone should adopt the 2-pronged approach to wealth-building and personal prosperity. The first prong is "passive wealth-building" which is to deploy investing and speculative strategies through stocks, ETFs, options and other vehicles.
The 2nd prong is "active wealth-building"...have a home business (part-time or full-time" to enact business strategies to build wealth in your spare time. A home business is a great way to be diversified (apart from your job) and it has powerful benefits (build wealth, save on taxes, etc).
Having this holistic approach means optimizing your prosperity and building long-term financial security for you and your loved ones!