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Top 3 Mistakes on Home Based Business Tax Returns
Tax Time Again!
Here we are again! Another year has passed and people are frantically gathering tax information in grand hopes of a treasured fat refund.
Here are the top three mistakes I have seen in my 35 years of preparing Home Based Business Tax Returns.
There are certainly many more, so see the bottom of the hub for my contact information.
Cell Phone Deduction
1.) Not taking 100% of your cell phone
Yes! 100% Why? Because you 99.9% of the people in the world are on flat rate plans. There is now logical way to break up these plans into business vs personal. What cracks me up is that when I ask new clients where their old tax person got the percentage, they either say I do not know, or they say that it was just made up!
So, with that said, you are in business and business people are mobile. You have a flat rate plan and deduct 100%!
Business Miles
2.) Not Getting All of Your Business Miles
This is a mistake that happens oin January 1st of every tax year. Business owners are generally slack in this regard. The government is willing to pay you over 50 cents a mile to drive your car! Why not take advantage of this. Make every trip tax deductible. How?
Every trip MUST have a business intent and be documented in a mileage log.
For example, one of my methods of gathering clients is getting business cards from boards in convenience store, laundries, etc. Therefore, in my WRITTEN business plan, I spell out how every time I get in my car, I am ALWAYS on the hunt to gather cards AND put up my information on those boards.
Now, my X used to get annoyed that I would stop everywhere, but I gathered 3,000 cards over time and ONE of those cards led to over ONE MILLION in sales.
If you are doing business correctly, you should be able to show where your business comes from.
Auto-Ship
3.) NOT deducting 100% of your Auto-Ship
This is a big one! Most tax people never do this! In their defense, they were never in a direct sales business or a home based business so, therefore, they have no idea.
The IRS states that a business deduction is one that is ordinary and necessary to carry on a trade or business. Your monthly auto-ship order is (in 99.9% of the companies) a requirement to get commissions - necessary.
In addition, in this industry, it is ordinary that these auto-ships exist.
This deduction alone is costing people $200-$1,000 per year!
What Next For Your Refund?
I trust that these top 3 mistakes helped you in saving more money on your taxes!
When choosing a tax preparer, you should find out these things:
1.) Was he/she ever involved personally in a home based business/Direct Sales?
2.) How many clients do they have in your industry?
3.) How long has he/she been preparing these type of taxes?
My personal answers would be YES, over 1,000, and over 30 years.
If you want to get more information or explore how you can save more money, email me at
loweryourtaxes@soon.com or
If you want me to do your taxes, go to http://www.Do-My-Taxes.com and make a $35 deposit to start the process.
Here's to a big FAT refund!