A simple tip to maximize profits is to track your expenses. One big benefit of having your own home business is that you’re able to deduct items as “business expenses.” Now, I’m not a CPA, but I do follow Turbo Tax Business software and follow the instructions.
How do you maximize profits?
One way for you to begin maximizing your profits on your home business is to reduce your taxable income by tracking your expenses incurred while running your home business. If you’re not making your millions (yet), it’s especially important for you to start now to reduce your overall tax burden. By chance, if you't yet made more money in sales in your home business than you've incurred in business expenses, documenting this and filing the appropriate taxes will reduce your personal income tax burden.
Here’s a brief list
- Start up fees – your kit and other fees
- Products (personal use is separated out – you can't write that off)
- Communications – Cell phone, phone service, internet, website, email, auto-responder
- Travel to meetings, events and customers – car mileage, tolls, airfare, parking, food
- Education – books, courses, seminar
- Office space (if in your home, check out this link)
- Office supplies – paper, pens, computer, postage
- Marketing – includes gifts
Be sure to check with your local country on what's allowed. Here's a link to the US IRS.
There are many applications to track your business expenses (see a Forbes article here). For me, it's easiest to put all my business expenses on a separate credit card. I also have a spreadsheet where I can enter all my expenses. Whatever method you choose, you must be willing to consisistly use it, otherwise it won't help you and you'll be scrambling come tax season.
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