by John DeSimone, President of Herbalife Nutrition
Before you decide to start your own business, you need to weigh the pros and cons of being an entrepreneur. The positives of being your own boss and controlling your destiny often outweigh the insecurities of owning your own business. You may miss out on a regular paycheck, but the upside is enormous: time, flexibility, and the potential for higher income. One opportunity that every business owner should know is possible tax breaks for a small business owner. There are numerous financial benefits any self-employed boss needs to know in order to maximize their hard-earned dollars.
Below are some practical suggestions to consider *.
Congratulations, you may have started your business in the last tax period. Did you know that up to $ 5,000 in incorporation costs can be tax deductible? Many expenses, including market research to determine the profitability of your business concept, are on the list of approved deductions. Make sure to check the list.
Make office cents
If you’re like most small business owners, your home quickly becomes your first, and sometimes only, office. Did you know that some home office expenses can be written off on your taxes? The savings can be substantial, and instead of paying for monthly office space, you can stay home and save money. The IRS provides extensive information on how to determine which area you will use for office purposes and how to file your tax return.
Keep the light on
Speaking of home office space, setting up your area at home also means writing off parts of your utilities – phone, electricity, gas, and cables. These costs are likely to increase as your business grows. You can deduct a percentage of these costs from your taxes as business use. Here’s an important tip: keep detailed records and receipts for utility bills, utility bills, and repairs.
Maximize the miles
If you use a car for business, e.g. For example, to pick up a product at a facility or to meet with customers for coffee, you can deduct the cost per kilometer. At $ 0.56 per mile, the deductions add up. Keeping excellent records is again crucial to this tax advantage. Record every work trip (excluding those taken to and from an off-home office) and miles on each work-related day. Your ability to quickly calculate total miles each year should be well documented and straightforward by keeping detailed records.
Get your fees
Do you have posts or professional memberships related to your company? Peel them off! Only contributions to professional associations, trade associations and chambers of commerce are deductible. Contributions to country clubs, airline clubs and the like, even if the memberships serve business purposes, are not deductible. Joining industry groups can be of great value to your business growth, and the ability to deduct dues makes membership a positive investment.
Spread the word
Entrepreneurs know that the more people know about their business, the better. While the cost of advertising and promotions – from signs to paid social media contacts – may seem prohibitive, the good news is that all marketing costs are 100% deductible. The list of approved expenditure items is substantial. So, be sure to check your annual expenses and get the tax breaks you deserve.
As a business owner, you or one of your employees may want to take a course to develop or improve your skills. These types of investments can be deducted as long as the education doesn’t qualify you for a new profession or business.
If you are a parent and your children are twelve years or younger, you will be happy to know that childcare can be tax deductible (depending on your income level). If your spouse or other adult family member needs care, you may be able to write off those costs as well.
There are many benefits to starting your own business, including what you can pull off now as part of your new business. Keep clear and accurate records and supporting documents. Make sure you separate personal and professional expenses. Note that the deductions often change from year to year. Working with a tax advisor can make the job easier or use the many online tools to streamline the process.
* Remember that I am not a tax advisor and your company has its own tax needs. You should check with your tax advisor which approach is best for you.
As President of Herbalife Nutrition, John DeSimone is committed to the company’s purpose and unique value: helping people lead healthy, active lifestyles through personalized nutrition and a proven business opportunity. DeSimone leads the company’s regional leadership responsible for growing the company’s leading nutritional business and increasing its performance in 94 countries around the world. In addition, DeSimone has overall responsibility for distributor functions around the world, including marketing, promotions, sponsorship, business method support, events, and communications with independent distributors.