The Economy, A Home Office, And You
With the economy gripped in recession more and more people are looking for a way to expand and/or diversify their income possibilities. A home office could be the smartest decision you ever make. Everyone can see the income possibilities, but not a lot of people realize the great tax advantages a home office creates. See how becoming a small business owner can benefit you.
Have you been watching the news lately? Well, if you have watched the TV, listened to the radio, picked up a newspaper or really just gone about your daily life, you've been inundated with the doom and gloom!
According to everyone you talk to we are definitely in a "recession". And it feels like one with prices soaring and industries everywhere cutting back or downsizing. Can anyone really feel safe in their current job or with their current financial situation?
First, let me say I agree that things are not as good as they were a few years ago. We have definitely hit a downturn. But before you throw in the towel, look at what you still have. We live in the greatest country in the world. Compare your "hard" life right now with some people in the world who are worrying about just getting enough to eat so they literally don't starve to death. Yes, maybe we can't buy that new plasma screen this year or we have to eat at home or not get our Starbucks for awhile, but we still have OPPORTUNITY.
We, as Americans, have the opportunity to improve our situation. We are not doomed forever. The economy will turn around as it always has. So take this 'recession' as an opportunity to change your life for the better. Some of the largest fortunes have been made during times of economic downturns.
Whether you have been hit hard or just a little by this latest downturn, I don't think anyone would complain about making a few hundred extra dollars every month or saving hundreds or even thousands on their taxes at the end of the year.
Creating a Home Office might be the best decision you could ever make. In today's rapidly changing economy, many people are realizing that their dream of having one job or one career is an illusion. Companies continue to downsize and capsize and they are doing it more now than ever before. Just look around your neighborhood stores to see some of the big chains closing. Government jobs are not even "safe" anymore. Both federal and state agencies are also laying off people and downsizing.
Many people are favoring starting a home based business over the traditional small business or career working for a big company. Some of the biggest reasons are the commute (now there is none), the easy entry and low startup costs (no storefront and quite often little or no inventory), the allure of being your own boss and setting your own hours, no employees, and of course the many tax advantages that can be gained by having a home office.
Even if you don't want to quit your 'day job', the tax advantages of having a home office are so beneficial it is worth it to start up a part time home business just to take advantage or them. According to Entrepreneur magazine 95 percent of home-based businesses succeed in their first year. Many of them achieve an income high enough to replace many traditional work situations.
There are tax laws for home-based business people who conduct their business either full-time or part-time. These laws are different than those that are applied to a typical 'employee'. With proper documentation they can deduct part of their house, their family (by hiring them), business vacations, and the cars they drive and business dinners or lunches. Also as a business owner you can set up your own pension plan and not be held hostage by the large companies that might or might not come through with your promised retirement.
As a home based business owner, you are entitled to an advantageous collection of tax breaks which can enable you to reclaim thousands of dollars in taxes. These are dollars normally taken out of your paycheck by the IRS.
Some of the good tax laws that allow small business owners to gain substantial tax breaks are the same laws companies like GM and IBM benefit from. If you have expenses that contribute to the success of your home business, they are fully tax deductible.
The IRS's only requirement in taking these deductions is that you legitimately treat your home based business as a real business and not as a hobby. This means that you need to regularly work your business and keep records and I highly recommend keeping a journal of your business activities as well.
In addition to all the benefits mentioned above, you can subsidize part of your home business with your tax savings. So while you are growing your home-based business you can use tax savings to grow it bigger.
If your home-based business produces a tax loss in the first year or so, you can use that tax loss against any other income you have. It can be used against wages earned as an employee, dividends, pensions, or interest income-or you can use the loss against your spouse's earnings if you file a joint return.
A home based business is a great opportunity and the light at the end of the tunnel for many of us. The tax advantages alone can make a home-based business the single best financial move you could ever make.
Now for your next question, Can You Succeed in a Home-Based Business?
You are in control so it depends on YOU! All businesses take time to grow and make money. The advantage of many home businesses is that they allow you to get started with little upfront cost, and without quitting your current job. You have the time to grow and learn. You just need the determination to stick with it.
Remember - Anything worthwhile will take time and effort.
And don't forget, you are getting substantial tax breaks so even when it doesn't seem like you are making money you really are.
And now the BIG question..... What business should I start?
Network Marketing is one of the best ways to produce a great income. A Network Marketing business opportunity is quite often misunderstood. Did you know that it is possible to start a Network Marketing business and create a major second income that continues to increase over time while working from home? How about doing this with very little money upfront and even doing it while only working part time?
I can tell you honestly that it is possible. In fact, with persistence and commitment, this income could soon replace your current full time income. When was the last time you recommended a good book, restaurant, or movie to a friend? How often do you do that? Probably pretty often, right? But when was the last time the publisher, restaurant or movie producer sent you a 'royalty' check for the referral?
Well despite the way things usually are, the idea behind what is now the fastest growing home based business trend in America and around the world, Network Marketing, is that you get paid for recommending things you like, use and believe in. Once you start, you'll do this more and more! And, you'll probably find some others that want to do the same thing. That's it in a nutshell.....
Think about it!
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ABOUT THE AUTHOR
Michael Tomberlin has been teaching and coaching for over ten years. He is now directing his efforts to teaching people more about creating their own home office. He has websites at http://www.healthylife-healthyplanet.com and http://www.bellascentedcandles.com . You can visit him there or contact Michael directly at firstname.lastname@example.org with any concerns, comments or questions about creating your own home business. Thanks.