What are the tax advantages to starting a small business?
I have been thinking for a while about starting up a small business, based out of my home. It will basically be a mobile auto service business. I have heard lots of stuff about tax advantages to starting up a small business. I have also heard that you can write off a vacation once a year as a board of directors meeting. What are the facts about tax advantages for small business, or where on the web can I find this info? Any help is greatly appreciated!
July 24th, 2010 at 2:12 pm
You can’t write off a vacation as a meeting. The IRS only allows deductions if you do legitimate business work. You can find information about what can really be deducted here: http://www.irs.gov/businesses/small/article/0,,id=99336,00.html
July 24th, 2010 at 2:54 pm
Your focusing on something very trivial. Sure there are tax advantages…but that isn’t the reason you go into business.
You should be getting excited about how much revenue you’ll be making, and how much of your personal time you will gain control of. That is the benefit that will outweigh your piddly tax advantages by leaps and bounds.
July 24th, 2010 at 3:48 pm
Your expenses are deductible against your profit. If after the math, you have a net loss from the business, you may deduct this loss against any other income (such as wage, social security, or investment income) on your 1040. There are some limitations depending on the type of business (e.g. passive rule) — however, if you are trying to set up a business, I would focus on the business ideas — do something you enjoy and run with it. Best of luck!!
July 24th, 2010 at 4:22 pm
When you’re looking at working from home there’s basically two choices. You’ll either be working for a company, or working for yourself. I’ve never really tried working for a company at home so I’m not sure how that works but I’ve been working for myself online for about 3 year.
Don’t bother wasting time looking at survey sites because they make their money from thousands of people paying to sign up each month and only send out maybe 100 3cent surveys every month. Nobody ever makes any real money from it except the sites sending the surveys out.
And with blogging, even if your blog is really popular, your money is still only coming in from having a bunch of google adsense links smeared everywhere that nobody really clicks. Most people make maybe $20/month with it, because you’re only being paid a couple cents per click when someone does finally click on one of the links.
You should also avoid things like rebate processing or data entry cause those are usually scams.
Don’t get hooked into the paypal send-a-dollar pyramid schemes of the mlm (multi-level-marketing) schemes because in a lot of causes they’re not only scams but actually illegal. The people running them just know it’s really unlikely anyone will report them.
It’s not always all that hard (you just have to look at what other people are doing and copy it) but it takes hours of sitting infront of the computer every day. There’s some days I hardly make $50 because I just can’t focus and other days if I’m having a really good day and working hard I’ll make as much as $300. What you make basically depends how much free time you have.