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US Congress enacts Home-Based Businesses Tax Savings Solutions

We are talking about tax savings laws passed by the United States Congress specifically to encourage taxpayers to actively operate a small home-based business – even on a part-time basis – with the intent to make a profit.

First, the fastest-growing business category — for several years in a row — has been Small Home Based Businesses. Maintaining continued expansion in that industry simply makes perfect sense for our national economy.

Second, unemployment puts a tremendous strain on the economy, and the leading job-growth category, again, is Small Home Based Business. Job growth = less unemployment = stronger economy.

Third, if every taxpayer had a part-time home-based business as a “fall back” or “safety net,” a signifigant layoff by a major employer would have less of an impact on the economy.

You are about to get a map to a lot of “information” i.e., small home based Business Tax Savings that are 100% IRS-compliant, easy to qualify for, and simple to document.

Most taxpayers (and most professional tax preparers) are clueless about these small-business-friendly tax savings, for a variety of reasons:

· The media gives very little publicity to these laws,

· Small-Business Tax law is not part of the ciriculum in most accounting schools,

· Knowledge of small-Business Tax law is not tested on CPA exams,

· IRS “publications” focus mostly on what you cannot deduct, not on what you CAN.

Here’s how your business can qualify for Small Home Based Business Tax Savings…

In order to be in compliance with the IRS,” you must:

1. Be able to Prove that you Intend to make a Profit.

o Write a Business Plan

o Estimate when you expect your business to become profitable

o Continually work to improve and expand your business

2. Tend to your business on a Regular and Consistent basis

o Regular and consistent activity is much more important than the number of hours.

o As little as 41 hour, 4-to-5 days a week is sufficient for the Tax Court

o Document your business activities in a day planner with ledgible notations.

3. Maintain Accurate Records

o Document All Business Income

Deposit all business income into a Business-only checking account

Keep a running log showing, for each check received:

Date received
Amount received
Source of income (company name, etc.)
Purpose of income received (i.e., Products Sold, Commissions, Bonuses, etc.)

o Document All Business Expenses

Use a business-only checking account for all business expenses
The purpose is to keep personal funds and business funds from co-mingling.
Use one or more credit cards exclusively for business expenses
Keep from co-mingling personal and business charges
Interest and fees on business-only cards are Tax Deductible.

o Document All Your Business Activities

A Daily Record is acceptable documentation(IF it is accurate and complete)
Show regular and consistent activity(as opposed to sporadic, inconsistent activity)

In my next article I will discuss what exactly you are able to deduct to take advantage of operating a small home based business for maximum tax savings.

What Should you do Next? Join the Savings Highway today and reap the many tax saving benefits the were specifically enacted by Congress to keep the United states Economy Strong.

1. Adjusted gross income, or AGI

Used to calculate federal income tax, your AGI includes all the income you received over the course of the year, such as wages, interest, dividends and capital gains, minus things such as business expenses, contributions to a qualified IRA, moving expenses, alimony and capital losses, interest penalty on early withdrawal of bank CD certificates and payments made to retirement plans such as SEPs …

Home Business Tax Deductions (50% Deductible Expenses)

It is extremely important to have a single platform for financial and operations information for unified vision and understanding and implementing of policies. Following are some of the requirements. Good job management software could provide Information on finger tips; it also help in completing huge volume of work by simple procedure. Another benefit of the use of software is easy search, elimination of mistakes, on time and precision of details in right places.

Business Integration

Software could provide the linkage for the business integration. For example this could help to provide the applets, sales staff could come in direct and fast contact with the staff and customers. You could also give access to the customers to their order status information.

Managing Subcontractors

The sub contracting is one such situation where there are many people have to be put on the right track for the best results. It is a stressful thing, while most of the subcontractors are small businesses and tend to work with spread sheets or whiteboards, there are however some software choices in market which can facilitate the work.

Cost Estimation

It is important know the whole process cost to give accurate price for the quotation. It is a good thing if you have past information that can be a base for future estimation. It should include all the materials, labors and overhead costs.

Inventory Levels

It is important to know the inventory levels especially for the manufacturing concurs, this gives a better idea of when to order, what order rate will be best, how much to order, and when to stop. There are some inventory which is laying there or is reduced in value what to do with that to sell or hold on. And off course the total storage cost of materials.

Tracking the Orders

Different jobs should be tracked to give a streamline view of the whole operations. Different departments require different and similar nature of materials and services they will get a better idea of their own and organizational level requirements of material and services required before hand.

Documentation

There are many documentation which are needed. There are legal requirements such as wealth, income, and tax returns etc. Also there are many legal requirements for conception, directors, meetings, nominations, elections, and the proceedings of an organization. Keeping a track of this will be best to provide the needed paper work.

Planning for Orders

Proactive planning could help in monitoring of the levels of jobs; this also helps in refining and adjusting the production schedules. Resources like production facilities are utilized in different levels in different times of year. In the off season you could use them in some more productive way if you use job management software.

Internal Communication

Many department of organization are some time placed in different location, this can create a communication gap which could result in different expectations and goals. To avoid this, good software could provide linkage, it could give more chance of better usage of resources, and for example two different departments could use the same machines or staff if they are free.

Time Management

Time management is much better when you utilize a job management software for example it can help in reviewing the capabilities, and help in controlling of workflow. This could enhance the labor efficiency with the flexible earning according to their efforts. It can also help in assigning of the resources like location, vehicle, machinery and human recourses in much better way.

New Payroll Software Features in ezPaycheck 2010 Makes Payroll Easier than Ever

Newly released 2010 edition of ezPaycheck software from Halfpricesoft.com provides more options and flexibility for payroll and check printing than ever before. Updates include up-to-date federal and state tax tables, additional printing formats and reports, and ability to print Forms 940 and 941. At only $89 per installation, ezPaycheck is affordable for any size business. Download available …

Business Owner? Add $5K of New Tax Deductions