The most popular thread we’ve had at the First Class Forum is “What’s Your Biggest Personal Expense?” It’s funny how a thread could launch a whole new company. But, that’s exactly what has happened.
The exercise is to look at your biggest expense. This is something that you currently can’t get a write-off for from your business. It could be a luxury car, designer clothes, or European travel. It could be anything!
Think about your biggest expense. What would you love to write-off?
Now, let’s think about what it means to get a write-off. The expense needs to be ordinary and necessary to the production of income. So, what’s deductible? Answer: It depends. It depends on the type of business you have.
For example, as a CPA with a tax firm, I’m not going to get a write-off for designer clothes. And I’m not going to get a write-off, or at least not much of one, for a luxury car. I might get the European vacation if I could prove that it was business-related. In other words, I traveled there on a speaking tour in an attempt to pick up new clients. In that case, some of the trip (the part related to business) could be deductible.
But, what if I really wanted to figure out how to write off the designer clothes? Well, in that case, I would need to find a business that required I buy designer clothes. That was the case for one of our forum members.
And, that started a whole chain of events that lead to new businesses being started.
One of the quickest ways to start a business is to start a blog. You’re reading a blog right now. It’s an easy way for someone to post on a subject. The Tax Loopholes blogs are largely about tax strategies, wealth accumulation and asset protection. Your blog could be about anything, including designer clothes.
And once you have a business, that you are running in a business-like manner with a profit motive, you have deductions. Note: You must have a profit motive. That means you need to plan strategies to monetize your blog right from the start. Most blogs will monetize (in other words, make money) by selling advertising space.
So, to do this strategy, you’d need three things:
First, you need ongoing content into the blog. You, or someone else, will have to blog on a regular basis about the subject matter.
Secondly, you need to have a profit motive and a way to monetize right out of the gate.
Thirdly, you need to have subject matter that supports the deduction.
Remember, though, the IRS will want proof that you didn’t just come up with a strategy so you could write off an item. This has to be run like a business. And that’s where it gets interesting. That’s because when you find a subject that you care about, it’s much more likely you will make money. If you care about European travel, then start a blog about your next trip. Talk about the best rates, where to stay, where to eat, what to see. Oh, and post about it on the First Class Lounge Forum because I know I’ll come visit your blog. That’s something I’m interested in.
And when people come to visit your site, you can have advertisements from various hotels and restaurants. You make money when people come to your site and then click through to visit places. Voila! You created a business and you just got a write-off.
Now, here’s the tricky part. How do you get a blog set up? The smartest way I know is to outsource it to someone you know, or someone a friend recommends. So, I have a recommendation for you: Jorge Manzitti, who is doing a lot of web-designing for me right now, can set up a blog for you, complete with advertisements, and a coaching program to help you get started for just $2,500. And he’ll do it in 2-3 days. Please visit his site at BlogBusiness2Days