Take a look at your paycheck. It can get downright depressing when you look at how much you make and how much you keep. But there are some people who look at their regular pay and are astounded at how much they get to actually put in their pocket. In fact, in some cases, you can actually put money in your pocket and declare a legal tax loss.
How does it work? There is one fundamental change you need to make.
It doesn’t matter how much money you make. It matters how you make your money.
Business owners and real estate investors will always pay less tax then a regular W-2 worker will. That’s because things such as home office, auto, cell phone, ISP, travel and the like suddenly become deductible if you can prove a business purpose.
You don’t need to spend money to save taxes. If you find those hidden business deductions that are actually items you already pay money for, and then convert them to legitimate business deductions, you’ve put money in your pocket right away.
There are a few rules to taking advantage of these deductions:
(1) You have to have a business. That means you are legitimately working at a money-making venture. If you’re still in the learning mode, the sooner you take action, the sooner you can start taking advantage of the tax breaks. Start your business today by taking action today. And remember that just because I said “money-making”, your venture doesn’t need to have a profit right out of the gate.
(2) The expense has to have a business purpose. That means that it is for something that is “regularly and exclusively used for business.”
(3) You have to pay for the expense. If you’re a cash basis taxpayer (most small business owners are) you need to show that you’ve paid for the expense in the calendar year either by a cancelled check, receipt (if for cash) or credit card payment slip.
(4) You need to properly report the expense. An experienced tax preparer can help you file your tax return in a way that reduces audit red flags.
Your own business means you control how much money and even more important, how much in taxes you pay. That all means more money in your pocket with freedom you control.
If you’re looking for a way to save on taxes with your real estate in light of all the new rules, make sure you sign up for the next FREE webinar Monday night, February 25th. Sign up at http://www.DianesSeminars.com.