7 Small Business Tax Deductions That You Don't Want To Miss

Are you neglecting to deduct business expenses on your tax return?

You could be leaving money on the table. Whether you're an established entrepreneur or just setting up shop, you can save thousands of dollars in tax deductions. So which expenses qualify? To receive a tax deduction, business expenses must be necessary and typical for the type of business you run.

There are exceptions to the rule. You can't write off speeding or parking tickets. But don't let this stop you from saving serious money on your tax return. Place those dollar bills back into your wallet by adding these commonly overlooked business expenses to the list.

1. Costs to Keep Your Business Running

As you maintain your business, you're bound to purchase office supplies and advertising. But did you know that you can also write off equipment repair, business calls, and office furniture payments?

There are limits though.

If your business goes under, you can't deduct costs for exploring a business opportunity. But you can deduct costs for products, materials, and supplies in your inventory.

You also can't completely deduct costs from starting your business. Instead, you can deduct up to $5,000 the first year and write off any remaining startup costs periodically over the course of 15 years.

Every cent you invest into your business is referred to as either a capital expense or a current expense.

Capital expenses are your business asset purchases, long-lasting equipment that will continually improve your business in subsequent years. Because capital expenses normally don't wear out after the first year, these expenses are depreciated and deducted over a period of time.

Current expenses are charges for equipment or services used every day to maintain a profitable business. They're normally used up in the first year, so you can deduct the total cost of current expenses on your tax return.

Repairs that add value to equipment, prolong the lifespan, or adapt an item to a different use can be deducted on your tax return.

Advertising fees to create promotional materials like business cards and print, radio, yellow pages, and banner advertisements are completely deductible.

If you regularly use the phone to call clients or customers, you can deduct charges relevant to your business.

Be forewarned though: if you try to mask personal purchases by claiming them as business expenses, you might be in deep waters when your tax return triggers an audit.

2. Home Office Fees and Rent

Do you work from home? Deduct a portion of rent, insurance, and utility payments if you have an office that is dedicated to business.

There is one drawback. Your office has to be exclusively for business use.

It's fine to work in your slippers, but you can't take a home office deduction if your bed is in the room unless your office is sectioned off. You also can't let your children play Legos in your workspace. And you most certainly can't watch TV in your office during downtime.If you do, your office won't be considered exclusively for business.

You also have to use your office consistently to take advantage of the home office deduction. Feel free to call clients, bill customers, take notes, set appointments, meet with clients, order materials, or write reports in your office. But an office that you only use occasionally doesn't count.

There are exceptions to the rule. If you run a daycare business or you have a room set up for inventory storage, you can still take the deduction even if the room isn't used 100% for business.

3. Auto Payments

Did you know that you can deduct the cost of gas consumed while driving to and from client meetings?

Whether you own a real estate business, regularly meet with clients, or rent an office away from home, you can save hundreds of dollars on your tax return.

Use your car for business? You can calculate your deduction one of two ways.

Deduct based on the standard mileage rate. If your regular business routine requires that you constantly be on the road, you might be able to save more by deducting a certain amount of money after every mile driven, along with toll and parking costs.

Deduct actual expenses. If you occasionally meet with clients or your car consumes more gas than average, you can save a great deal more by deducting a portion of expenses for gas, replacement tires, oil changes, insurance, and car registration.

Always keep an organized record of your car usage, and filing your federal and state income taxes will be as simple as doing a few math calculations.

4. Travel and Entertainment Costs

Do you remember that vacation deal you purchased right before your last business trip?

Write off a portion of your plane fare, depending on how you spent your vacation. Part of your transportation costs is qualified as a deduction if over half of your trip was spent on business. The more time you devoted to your business, the higher the deduction.

Needed to pay for clean clothes while you were away? You can deduct laundry and dry cleaning expenses. You can also deduct commuting costs, lodging fees, tips, fax charges, and costs to ship product samples and display materials.

Moreover, if you've ever hosted an event for your business at your office, restaurant, or another location, you can deduct entertainment expenses that helped promote business growth or well-being. Keep in mind that only 50% of meals are deductible.

You can even deduct moving costs if you had to relocate your home because of work. If the move wasn't directly related to your business though, you can't claim the deduction.

5. Educational Materials and Professional Fees

Have you purchased a book to learn a skill that would directly impact your business? How about that copywriter you hired to craft a sales page that would later transform a product launch into a massive success?

Business-related books, legal fees, and professional services are all fully deductible on your tax return.

You're not just limited to books and independent contractors though. If you pay an accountant or purchase a tax program every year, you can deduct tax preparation fees.

Own a business with hired staff? You can reduce taxes by deducting salaries, bonuses, and fringe benefits like health insurance and sick leave.

6. Bad Debts

If you sell your own services, you've likely stumbled across an occasional troublesome client. Your client might refuse to pay you for work performed, lowering your profit margin for the month. Maybe you've even loaned money to customers or suppliers, but the loan was never paid off.

Luckily, this income loss is completely deductible as long as you provide written documentation stating the amount of the debt, interest rate if applicable, and the steps you took to collect the debt. If you can prove that you've made several attempts to receive payment and the debt is impossible to collect, you can write it off on your tax return.

Searching For A Legitimate Network Marketing Business

So you've decided to start a home based business, but you are not sure if the network marketing company you want to join is right for you. Everything you have heard about them is "TOPS". But you're getting all of your information from the company's independent associates and the up-line. Every time you get on a conference call, the information they provide sounds great. The presenter say everyone is making tons of money, going on trips all the time, driving expensive cars, and living in mansions. Who wouldn't want to be part of all that success? They talk about the company, the product, and the opportunity. And then, it's decision time. All of the excitement gets your adrenalin pumping and you're ready to jump in. But you decide to be cautious, and do a little research on your own. After you arrive home, and its just you and the mirror, you have second thoughts. "Can I really do this business?", you ask yourself. "What happens if I can't get anyone to join?" "Is this one of the legitimate home based business opportunities? Or is this another MLM company that feeds off of people like me?" All of sudden, you are not confident as as you were on the opportunity call. Don't feel bad because you're not alone.

Tens of thousands of North Americans decide to start a home based business every year. And many of them opt for a network marketing opportunity. But the facts remain the same, whether it is a traditional business venture, or an MLM opportunity, most new home based businesses aren't successful. Why? Its a combination of poor or no research, bad business planning, and unrealistic income expectations.

When a person enters the network marketing arena, it usually goes something like this. A friend invites them to an opportunity meeting or to listen in on a opportunity call. When they do so, They usually get caught up in all the hype, and before they can say "What am I getting myself into?", they have brought into a business, and joined a company they really know nothing about. It happens all to frequently; from hotel conference rooms to private homes, to conference calls, thousands of people join business opportunities every week.

Most of these new business owners never get their business off the ground. And if they do, most never turn a profit. Why? The main reason is that most people aren't ready to start their own business. They weren't looking to start a new business in the first place; usually someone else convinced them to do so.

But there are some people who are ready, and are looking to get started with a business opportunity. And you may be one of them. If so, you probably already have the passion and the drive to make it happen.You probably have the investment money to get it started. And you probably have the money to sustain yourself and your family while you build your business. You are ready. You have researched a number of MLM and network marketing companies that peak your business interest. And now its time to put them to the test. Here are ten questions you must ask before going into business with a MLM or network marketing company:

1. Is the company solid? Financially, and Ethically.

A. How long have they been in business and what is their financial situation? There are hundreds, if not thousands of new business opportunities that have popped up in the last ten years. It is a good rule of thumb that if a business has been around for 5 years, they should be making a profit.

B. Are there a lot of complaints with the BBB, or your State Attorney General's office? If a company has more than a few complaints, that should trigger a yellow (caution) flag.

2. Is there a real need in the marketplace for their service or products?

A. What percentage of people need the product or service? If your product or service is only needed by a small percentage of people, then you will have a difficult time marketing it.

B. What percentage of people want the product or service? If everyone wants it, or could use it, but very few know its available, then you might have a gold mine. Still, you will have to get the word out; and that's where the company will be counting on you. There must be a balance between 'needs' and 'wants', or supply and demand, for a product to be successful in the marketplace.

3. Does their product or service support itself without offering the business opportunity?

A. In other words, is the product affordable or is it overpriced? Many companies offer inflated prices on their products or services, making it difficult to sell. Often times this leads the associates selling the business opportunity, instead of offering the products. Beware of companies that offer extremely low commissions when you make a sale on the product side, but give huge bonuses when you recruit someone into the business.

B. Is the product or service exclusive to network marketing or can you get it anywhere? If a potential customer can get your product just about anywhere, it will be that much harder for you to make a profit and you will need to be able to convince your potential customer that what you have is better than the rest.

4. Do they have a real internet presence?

A. Can your prospects purchase the product from you online? This is a must in 21st century network marketing. Building a client base will still require human interaction, but when your customer is ready f to make another purchase, this is the easiest, and safest, way to provide them with immediate access to your product(s).

B. Is the company new to the internet? Do they have a proven track record? This is important to your success when it comes time to make the sale, or recruit an associate. A good company will always have an IT department with web developers that keep the content current.

5. Can you recruit online?

A. Can you manage your down-line online? It is vital to your business to be able to track your sales to the penny. Many companies only provide BPV, or product volume, etc. But you want to have daily access to gauge your sales volume in dollars and cents. This also pertains to your down-line. You should have the potential to send broadcast messages and thing of this sort. It will be a very important for communication with your organization.

6. After the initial investment, how much money can you expect to invest before you see a check? One of the advantages in going into business with a MLM or network marketing company is supposed to be the low initial investment. Combined with the potential for quick income, these to items are essential in building a successful business. Its called ROI (Return on Investment). The faster you receive it, the greater potential you have of growing you business. The bottom line is if you don't see yourself drawing a commission within 90 days of starting you business, then another caution flag should go up.

7. How fast and how often do they pay commissions?

A. Are checks distributed once a month, once a week, or once a day? Many years ago, MLM companies only cut checks at the end of the month. Today, that's hardly acceptable. Today, money moves a lot quicker then it use to. And it has to in network marketing. Getting your commissions to you as quickly as possible is vital so that you will have money to sustain your business.

B. Are checks direct deposited? Point blank; this is a must.

8. Is there a real potential for override income?

A. If you are at least one level above your recruit, are you entitled to override income? Some companies expect you and your organization to produce a certain amount of volume, or meet certain monthly quotas, before you can receive override income from your downline. Generally, a good rule is to find a company that offers over-rides; if you recruit someone and they are at least one level below you, you should be entitled to overrides from them and their organization.

9. Is there potential for real residual income?

A. If your customer continues to buy the product or service, do you get monthly commissions? Residual income means you get paid, as long as the customer you introduced to the company, continues to purchase the service or products. This is a no-brainer and real way to build wealth in network marketing.

10. Is there real training?

A. When you join a MLM company, more than likely, they will encourage you to make your list by going after your warm market. Your warm market is your relatives, friends, neighbors, and co-workers. They will encourage you to have a home meeting, bring your guests to the weekly hotel meeting, or invite them on a conference call. That is all good for generating a quick return on your investment while you are learning the business. But what happens if and when the list drys up? What happens if the person who recruited you drops out of the business? Are your up-line folks accessible? Are there company sponsored training and events?

B. Is there training that teaches you how to really tap into 21st century internet marketing? Today the internet is the engine that drives network marketing. Billions of dollars are earned in network marketing utilizing the world wide web. When you decide on your business, make sure that your recruiter has a plan that will position you so that you will be noticed on-line. Make sure that it includes training that will teach you how to target your market and drive traffic to your website. This is the single most important lesson that you will have to learn to ensure you are successful with your new business.

So here you have it. The ten questions that must be asked to determine if the company your are interested in offers a legitimate home based business opportunity. You want a company that will assist you in laying the foundation for real success. If that company provides good, concrete answers to these questions, then it's a good bet that going into business with them will be beneficial. Researching to find the right company and network marketing business to join could very well be the most rewarding time you will invest in your future.

Is a Home Business Right for You?

Many people, especially when frustrated by working for someone else, have considered starting a business of their own at home. Not only are you your own boss, but you can work whenever you want to. Creating your own home business can take some planning though.

Use Our Tips To Help You Get Started Your Own Home Business.

Sign up at forums, and also discussion groups, that cater to owners of home businesses. There are lots of easy to find, informative websites that can give you invaluable advice. In addition to forums, you may find great information in a number of blogs.

Always research anyone you hire to do work for you. Poor employees can turn a successful fledgling business into a flop, so be sure that you hire reliable people with the skills needed to help your company grow.

Your website should be updated when your stock of a particular product runs out. Let your customers know the status of their order. If you are out of stock, let them know. If an item has been back-ordered and is not going to be in stock for weeks or months, state this clearly on your product page, and give your buyers the opportunity to purchase an alternate item that is similar in quality and price.

You should not put in your notice at your primary job until after you have started operations at your home business. A new business might take a while before it can generate profit, therefore, it is wise to keep your job going. If you have money before you start you will always be ready for the next new thing.

An office is necessary when you are based at home for work purposes. It doesn't have to be gigantic, but it does need to be cozy. Make sure that your office makes you feel comfortable and confident while doing business. Use the space that you have for your office as efficiently as possible.

Your business objective is a short description about your business, usually two to three sentences. You should state exactly what your goals are with your business and what it is about. Also describe what is unique about your business and its goals.

Develop a mailing list for your home business. Try to communicate only important issues as you do not want to spam your customers. Certain entities utilize mailing lists to advertize sales and new items. It can also be used to send handy tips to your customers. Add a signup box to your site so people can join.

Risks, as scary as they are, are necessary to achieve true success. When you experiment and try new things, you can get new customers to visit your site. This can help you to make a lot of money. If you always keep the same routine, you will never know if something else would have done better.

Designate a specific room in your home as your work space. It is imperative that you keep things organized, so make sure you have the proper amount of space for your things. Doing this will ensure that your business stays organized, and organization in a business that is based from home is extremely important.

It can be easy to get too involved in your work if you stay at home all the time. Creating a 'work space', in which you do work on your business and nothing else, will make it easier to stay focused; also ensure that you set aside some fun time every day to enjoy with friends or family.

When you borrow money, investors may feel entitled to ask more questions than you are willing to answer. Maximize your profits with the money you already have.

You should get a DBA or Doing Business As license. Your bank or chamber of commerce will be able to assist you with advice in this regard. You will most likely need to pay a modest fee. It's important to do this so that your personal bank account and business accounts are kept separate from one another.

A good home business tip is to look as professional as you can. Nothing will drive customers away quicker than having a web site that looks unprofessional. Look at other professional web sites to get an idea of how to make one.

Home business owners tend to congregate online. Investigate forums and message boards, both those devoted to your business niche and those outside it. Solid advice where you can learn new lessons about operating your own business can come from many different areas, so you don't want to limit yourself to only your niche.

When you are doing your taxes, make sure to take into account all write offs such as business trips. You can write off as much as half of all travel expenses related to business.

Choose a home business that you know something about. Many people make the mistake of thinking they can learn what to do as they're working on their business. Yes, it's possible, but chances are you'll be more successful when you have some expertise in the industry you are choosing. You should know what your weaknesses and strengths are and start building your business around that.

Save budget money by not investing in high-priced web services. Look for options that will allow you to share server space. This kind of server is known as virtual hosting and can be useful if you're only running a small website. You need your own business server when hosting a forum on your site.

When you can get by with a simple, modest website, do so; invest in thorough reliability testing instead of fancy bells and whistles. You should design your site to be browser-friendly on all available formats, such as mobile devices, and try to make your information follow similar formats on all devices. Verifying your website's accessibility across multiple platforms will ensure that you don't miss out on any potential customers just because they use a different browser than you do.

Common Online Business Blunders

Because of the internet we all have the opportunity to make our own success and live the life of our dreams. But this does not mean that building a thriving internet business is easy or a way to "get rich quick".

Starting and building an established online business takes commitment, persistence, hard work, and the drive to make it succeed. Unfortunately many people are led to believe it is as simple as putting up a website, placing a few ads and watching the money pour in.

That is exactly what I thought over 16 years ago when I first started online. I learned fast that building an online business would be much more than I ever imagined. While teaching myself how to make my business successful I made many mistakes. But I persisted and worked very hard. Then a very exciting thing happened. I started experiencing the benefits of success - both financially and personally. I find this work to be very rewarding in many ways and would recommend to anyone to stick with it and make it happen for yourself!

Mistakes are a very valuable part of building a business if you learn from them. Use your mistakes to your advantage. Below are some of the most common mistakes we can make when developing an online business.

1. Not Choosing Your Passion - In order to build a successful business you have to do something you are passionate about. It is hard to work 16 hours a day on something in which you are not interested. What do you love? What can you see yourself doing that you would not consider a "job"? I have always been a lover of books and wanted to own my own bookstore. The internet allowed me the opportunity to make this dream come true!

2. Unrealistic Expectations - As I mentioned earlier, so many people are misguided into believing that making money online is quick and easy. Please do not fall into this trap! Make sure you are ready and able to put the time and effort into your business. Be prepared to work months or even years before reaping the benefits of success. Expecting unrealistic success is one of the main reasons people give up too quickly.

3. Too Much Preparing, Not Enough Doing - It is a good idea to plan for your business but at some point you actually have to start doing something to get your business going. I know one lady who spent years going to seminars, paying money for complete business packages, buying books, etc. In all this learning, listening and paying out money, she never did start a business. This is also an easy trap to fall into. Yes, you do need to do research and learn but don't make that your business.

4. Too Much Flash - A business website should be clean, sharp, easy to navigate and professional. Don't buy into the idea that you need music, flashing lights, or excessive clutter on your site. If you do offer music or a video give people the choice to listen or watch. Don't have it automatically play when a visitor arrives. Don't put too many banners, ads or flashy graphics on your site either. This will only result in slow loading time and losing visitors.

5. Being Too Personal - Although a small personal touch added to your business is a good thing, don't fill your site with pictures of friends, family vacations, or your life in general. Don't overdo on telling of family stories, get-togethers, etc. Business and personal life must maintain a degree of separation. Create a personal bond with your customers but don't overload them with your own personal life.

6. No Online Support - Don't try to go it alone. Contact other online entrepreneurs. Join groups. Network and obtain support from business associates. When I first started I knew a lady online who encouraged me to start my own newsletter. I had many doubts but she convinced me I could do it and that was a big step towards my success. I will never forget her or the help she gave me when I needed it. You can find many more experienced online business owners who will gladly help beginners and other business owners.

7. Treating Your Business Like a Hobby - I have seen this so many times. People mistakenly start an online business thinking they can work it when they have the time. They say their family comes first and will get to it when they can. This is definitely not true. Your business needs your full attention and you must give it the time it needs to flourish. Yes, my family came first as well which is exactly why I started online. You cannot treat your business as a, "I'll get to it when I can" project.

8. Doing Too Much - Another unfortunate trap I have seen many people get caught in is signing up for multiple business opportunities and thinking they can make them all work. I have seen people trying to run as many as five different businesses. Spreading yourself too thin will accomplish nothing. You should decide on one business at which you will work your hardest and focus your complete attention on making it a success.

9. Not Keeping Up to Date - Running a business is an ongoing process. You need to always be learning, studying new marketing techniques, watching your competitors, etc. Don't fall into the "if it works, don't fix it" routine. Just because your methods are working now, doesn't mean they always will. You have to keep on top of things!

10. Grammar and Spelling - This is an oldie but a goodie! Over the years I have seen some grievous errors in spelling and grammar. Please be sure to proofread and correct any mistakes made. If necessary, have someone else proofread for you. Fresh eyes can catch mistakes you may have missed. I have made some of these mistakes as well so I regularly have someone proofread my work. If you are not sure of the spelling of a word or proper use of grammar, look it up. Your business and your reputation are certainly worth the extra effort!

I have made several of these errors and have definitely learned from them. Developing an online business can certainly be overwhelming and frustrating at times but if we commit to it, we can do it. Do not give up! Make your dream come true!

Selling a Business Through the Buyers' Eyes

Take off your shoes. Go on! It's time to step into someone else's.

The buyer. Ruthless, clever, efficient, and thorough. At least, that's how they may seem like when you first meet them. Let's shatter that barrier of the unknown, and understand what areas you need to cover in order to put your business out to tender - it's time to examine the behaviours and processes of 'the buyer'.

1. Motivation

Picture this, Mr or Mrs Buyer: you've found yourself in a position where you have a good amount of capital behind you, and you want to start running your own business.

You have two options.

The first is to start your own business from scratch - a cheaper, but slower and much riskier endeavour.

The second is to purchase an existing business and capitalise on its already established profitability and structure.

You opt for the one that is more likely to bring you a quick, consistent income. You opt to buy-in.

2. Who are you?

And so, Mr or Mrs Buyer, what are you looking for? Chances are, you're after a business that:

Is in an industry you're very experienced with

Is in a situation/environment that you find quite favourable economically

Is the best performer around (i.e. the best deal you can find)

If you're really clever, you will have also engaged an experienced broker to aid in the purchase of your business, because you know their commission will be well-offset by the difference in result.

3. Business, Business, Business

You've found a few businesses matching your very strict criteria. Now it's time to get your hands dirty. You start looking into the financials, talking to the staff, talking to the seller and talking to the people outside of the business.

You have five simple questions that will make or break this business in your eyes:

Are the reasons for selling favourable? You don't want to buy a business that the seller is leaving because they've run it into the ground. If they're selling because they've 'made it' on the other hand, you'll consider buying it at whatever price they ask.

Does the business have a good general presence? Annoyed suppliers, unmotivated staff, unhappy customer base - any of these things could break the business, or be enormous issues that you will have to fix when you take over.

Does the business have control over their market position? If the business is a big player in the market space, you will have a terrific opportunity to adapt and grow the business. The alternative is to live in fear.

Do the numbers balance? If the cost of labour and materials are preventing the business from running at a good margin of profit, you may want to look elsewhere. Sometimes, smart cost cutting can improve the bottom line without reducing the quality of services or products, but if the numbers don't work, the business won't either.

Is the business well respected? A reputation is not something we can easily put a dollar value to, but buying into a business with a solid reputation with customers and suppliers sets you up with a great chance of success.

4. The Finishing Line

The business you've got your eye on has passed all of your tests with flying colours, but it's not out of the woods yet. It's time to dive deep into the business.

Here's your last piece of homework:

Check the cash flow, profit and loss statements and balance sheets of the business for at least the past three years. If the business is financially healthy, we'll give it a tick.

Come up with ideas on how to grow the business. If you can come up with a lucrative new product or service, or if you can see a change in processes that will that will greatly improve the bottom line, the business will be worth even more to you.

Evaluate the intangible assets. Does the business have Intellectual Property? Does it have any trademarks or patents? These are all things without a fixed value, but can contribute greatly to the viability of the business.