Business

   Business Tax Breaks

 This tax benefit is relatively new. Congressional law now allows taxpayers to elect to deduct up to $5,000 in new-business Start-Up Expenses AND up to $5,000 in Organizational costs in the tax year in which their business begins. This is a huge new benefit for small and home-based businesses. “Start-up costs” are those expenses which you incur before you actually begin offering goods or services for sale—i.e., the money spent getting ready to open a business. They are pretty much the same expenses that will be called “Business Operating Costs” once the business has actually begun. Examples of “Organizational costs” are fees paid for a business license or costs of setting up a business entity such as an LLC or Corporation. By the time you finish going throuh this information, you will have a thorough understanding of three things that the vast majority of American taxpayers (and most tax preparers) do not understand in the least:

 

Business Owners, on the other hand, get to write-off lots and lots of expenses, from rent to cell phones to furniture to cleaning crews, etc.

Business Owners have a very different (and far better!) three-step tax system:

Step 1: Earn revenue from selling goods or services

Step 2: Spend whatever they need to on operating expenses to keep the business financially solid and growing

Step 3: Then pay taxes only on whatever is left over.

 

The long list of deductions commonly available to Business Owners, include:

 

  • ̆ Gas, electric, water and sewer
  • ̆ Cleaning crews to dust, vacuum and empty the trash
  • ̆ Computers, copiers, fax machines and telephones
  • ̆ Advertising ̆
  • Paper, pens and postage
  • ̆ Bank fees on business accounts ̆ Desks, sofas, coffee tables and other furniture
  • ̆ Credit card annual fees (for business-only cards)
  • ̆ Depreciation ̆ Painting, wallpaper, carpeting and other repairs/maintenance
  • ̆ Legal and professional services
  • ̆ Bad debts from sales or services (accrual method)
  • ̆ Phones bills, cell-phones, pagers and Personal Digital Assistants...plus much more.