You can make these and other ordinary, personal expenses tax deductible.
How would you like to get paid $11 for every 25 miles you drive?
How would you like to write off half the cost of restaurant meals with friends?
How about writing off a vacation at the beach with the family?
You have to make these personal expenses into business expenses. The easiest way to do this is to start a part time, home based business.
Your business will have expenses. Rent, or mortgage payments, salaries, auto, travel expenses, etc. It is no different from other businesses in this regard.
The IRS has special rules for writing off business expenses. They can be deducted from the business income first, before any taxes are paid on the income. The business only pays taxes on any income that is left after all expenses are paid.
These rules apply to your part time business as well. Most businesses start small; Dell computer started in a dorm room, Apple computer in a garage, Snapple Beverages in a Brooklyn apartment, etc.
You have to give your previously personal expenses a business purpose, so that they become business expenses.
Instead of giving your children allowances, you give them a pay check!
I have employed my boys to distribute flyers throughout our housing development, soliciting people who might want to sell their homes.
As long as their compensation is reasonable and they are paid via company check you can now deduct their salaries as business expenses. The fact that you require them to put the money toward their college savings or their wedding is no one\'s business but yours.
If you are driving to the mall, stop off at the local diner to stash some of your business cards in their business card holders atop the cigarette machine in the lobby. That is a legitimate marketing expense and makes you eligible for that driving allowance of 44 cents per mile.
While at the diner, you meet with a couple of friends who are also interested in your business or its products. As long as you correctly document the meeting, 50% of the cost can be written off as a business expense.
In all likelihood, your business will show a loss as the income in the early years will probably not be enough to support all of the write offs.
The law allows this loss to be written off against past, future or current income from other sources, say your regular job income!
The loss reduces your salary or self employment income, thereby reducing your taxes for the year.
This strategy can result in saving $2-$3-$6,000 per year or more for the average family!
Your CPA has probably not told you about this strategy, either because he/she is not versed in them or because you did not ask. It is also difficult to sit and counsel you when you show up in his office at 5:30PM, April 14 with a shoe box full of coffee stained receipts to have your taxes done.
Home based business deductions are a specialty and not every CPA is up on them.
However, you will need the guidance and support of an accountant or CPA that is knowledgeable in this area to make sure you take all of the hundreds of possible deductions you are allowed as a small home based business.
Also, you will have to be shown how to document these expenses correctly, if not, you may end up in trouble with the IRS.
To sum up, you need to have a home based business and you need to have the guidance and support of a qualified professional to help you correctly document your expenses.
Once in place, you will be able to slash your taxes by thousands of dollars each year by converting once non-deductible personal expenses into tax deductible business expenses.
Oh, yeah, that vacation at the beach? Why do you think they plan seminars and conferences at resorts? Generally speaking, as long as you spend more days on business than on pleasure, the trip is deductible! Enjoy!
Copyright 2006 Bill Young. Bill is a real estate investor, Internet investment columnist and personal wealth consultant. If you would like to learn more about giving yourself a \Next Day Pay Raise,\ visit http://301url.com/PayRaise or contact him at 877-291-3642 to speak to your group. You can also visit his site: http://ARealEstateIRA.com to learn of other wealth building strategies
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