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Home Based Business Opportunity spells money

By       Message Milton Jordan       (Page 1 of 1 pages)     Permalink    (# of views)   No comments

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When you become employed, the government requires you to declare how much tax you anticipate owing each year, based upon your salary and minus legal allowances. You make that declaration on the federal W-4 form. With that declaration in hand, the government requires your employer to deduct 1/12 of that tax monthly and send it to the IRS. Now, let's say you declare that you will owe the government $6,000 in taxes. Your employer is to send the IRS $500 each month. Therefore, when the tax system works as it's supposed to, how much should you owe the government at the end of the year? Zero! How much should the government owe you? Zero!  So when you have to pay tax at the end of the year, you miscalculated on the W-4. More likely than not you claimed allowances you could not substantiate. The same thing is true if the IRS owes you a refund. You miscalculated on your W-4. So, if you declare, on the W-4 that you will owe $7,200 in taxes when you actually owe $6,000, then your employer, based upon your declaration, deducts $600 each month.  At the end of the year, you have personally made $1,200 available to the government for them to use, as they see fit, and in your tax refund, you ask for it back. Here's another sad fact, to get it you must ask for it. Don't ask! Don't get! Even worse though is the fact that you could have used that $100 each month yourself. Now what if five million taxpayers make this mistake? That means those five million taxpayers loaned the government $5 billion, interest free, for one year. At just 10 percent simple interest, the government earns a half billion in interest on your money. No! I'm not trying to make you feel badly. Rather, I just want to identify the problem so we can see the solution. Obviously, one solution is simply to calculate your taxes accurately, and wind up with a zero balance on December 31 each year of your working life. But because this government operates two tax systems-one for employees and another one for business owners-there's a better solution. Imagine a $5,000 revenue increase without a part time job In this report I will show you how you can increase your annual income by at least $5,000 without working a part time job, and without increasing any of your living expenses. You will learn a simple and effective way to begin your transition from the left side to the right side of the cash flow quadrant and transform your financial partnership with the IRS into a positive relationship. Introduction to federal taxes 101 First, though, consider this quick lesson in the US tax systems. In chapter one of his book-It's How Much You Keep, not How Much You Make that Counts, Ron Mueller explains: "The United States has one tax system for employees, which includes most working Americans, and a very different, much better tax system for business owners. Employees are very limited in what they can write off. Businesses engaged in working toward or earning a profit are entitled to a wide variety of legal deductible business expenses in their pursuit of that income and profit. Employees, or W-2 wage earners, work for someone else. Most taxpayers fall into this category. They have few tax deductions available to them, usually just:
  • Mortgage interest
  • Standard deductions for dependents
  • Gifts to church or charity
  • Contributions to a retirement plan
Essentially, for employees, it's a three-step process: Step 1: Work hard to earn a decent wage Step 2: Immediately lose a huge chunk of those wages to taxes Step 3: Then you have to live on whatever is left after taxes are paid Business owners, on the other hand, get to write off lots and lots of things from rent to phone bills to furniture and cleaning crews. Business owners have a very different three-step process: Step 1: Earn revenue from selling goods and services Step 2: Spend what they need to on deductible business expenses to keep the business financially solid Step 3: Then pay taxes only on whatever is left over The long list of deductions available to business owners include:
  • Mortgage interest or Rent
  • Gas, electric, water and sewer
  • Cleaning crews to dust, vacuum and empty the trash
  • Computers, copiers, fax machines and telephones
  • Paper, pens, ink cartridges and even postage
  • Desks, sofas, coffee tables and other furniture
  • Painting, wallpaper, carpeting and other repairs/remodeling
  • Phone bills, cell phones, pagers and PDA's (Personal Digital Assistants)
  • Newspapers, magazines, books and on-line media
  • Plane fares, hotel costs, meals and rental cars
  • Lunches, dinners, ball games and theater tickets
  • Security alarms and hidden cameras
  • Health, life, dental, vision, disability and unemployment insurance
  • Company cars (and even better)
  • Contributions to Employee Retirement Plans
  • Holiday cards, gifts and postage
  • And just about any other expense that qualifies as 'ordinary and necessary to operate their business."
Taxes represent the single largest bill the average American employee pays! Every single payday, the amount withheld from your paycheck for taxes before you even see it is probably more than your housing, your cars, your food, and your clothes- combined! When you add together Federal taxes, State taxes, Social Security taxes, Medicare taxes, sometimes county or city taxes, and all the rest, if you're like the 'average' wage earner in America, you could be paying between 40 and 50 percent of your hard earned wages in taxes, before you even see your paycheck." There's a better way That's the problem. In this same first chapter, Mueller provides the answer: "How much less would you pay in taxes if you only had to pay Uncle Sam a percentage of your leftover money, like businesses do, instead of paying a percentage of the gross wages you earn, like you do now? You would pay a whole lot less in taxes, that's for sure! Here's the good news. It is possible for an individual to get most of the same tax breaks as business owners get. What 'activity' (remember get started) provides you the easiest and most powerful way to lower your tax rate? Well, let's take a look…1.      "If a Home and Personal Expenses are not tax-deductible, but 2.      If the Expenses of a Business operated with the intent to make a profit are tax-deductible, the obvious conclusion is . . . 3.      Tax-Deductible Home-Based Business!" (From Mueller's book)Let me show you the money! It's easy to achieve the initial tax advantage of having a home based business. Follow these steps: 1.      Declare yourself to be in business by licensing and registering your business locally and opening a business checking account. 2.      Set aside a space in your home that you will use regularly and exclusively for business. Measure that space and establish your Business Use Percentage, (BUP). 3.      Write a preliminary business plan, with a focus on the business budget for your first year of operations. 4.      With your budget in hand, go to work, get a new W-4 form, and for every $2,800 of your business budget, add an allowance to your W-4 in addition to the standard allowances you qualify for as an employee. Submit your revised form.To illustrate the principle, let's say that your budget for the first year of your business is $14,000. Divided by $2,800, a $14,000 home-based business budget qualifies you for five additional allowances on your W-4. Those additions could increase your net pay by maybe $400 per month. Use that money exclusively for your business. The estimated additional income totals about $4,800 annually. That's how being in business helps your bring home more money from your job! In addition, earn about $400 net each month that year from your business, which you will work part time, without quitting your regular job, and your total new revenue is $4,800. That's money you get to keep from your regular salary that would have otherwise gone to pay taxes in advance. Now if you can just net $100 per month (after deducting all business expenses) in your business, you will earn $1,200 or a total of $6,000 for your first year.  

 

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I am a former criminal who has been 39 years (12/9/68-12/9/07) making the arduous trek from crime to contribution. I am a bona fide expert on how to break the crime habit, earn an ever-free life and achieve the criminal and prison background into (more...)
 

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