Knock-Knock-Knock
Knock-Knock-Knock
Who's there?
The IRS!
The next quarterly payment of estimated income tax for
the self-employed is not far off. Network marketers who
receive a form 1099 at the end of the year, and/or who
are expected to owe $1,000 or more in taxes, must file
a form 1040-ES Payment Voucher quarterly to avoid
paying a penalty.
When it comes to paying income tax, I'm like Arthur
Godfrey who said, "I am proud to pay my taxes. I'd be
just as proud to pay half as much.
Like most network marketers, I work hard for what I
earn and do not savor sending the government any
more money than what I legally owe. So you can
imagine how I felt four years ago, when I learned I
had overpaid my income tax by some $9,800 over
three years.
I had trusted the guy who did my tax returns. After all,
preparing tax returns was big part of his business.
But guess what, I fired him.
Once I learned what the law provides home-based
business owners to deduct, I went back through three
most recent years of returns, revising my 1040 to claim
deductions my tax guy didn't have the foggiest notion
existed. Or if he did know, he failed to ask me about
them.
For instance, my tax guy failed to ask me if I had any
dogs. Did you know your dog (or three dogs in my case)
qualifies as a "security system" for your home-based
business? 100% of all dog food, Vet bills, license fees
and medication is tax deductible! I have the IRS tax
code to prove it. My tax guy didn't know that. I called
him on it and told him to look it up for himself.
You see, I did something worthwhile. I invested in a
well-known and respected home-based business
tax-reduction book. I learned that with some 43,000
tax codes on the books, a typical CPA could not
possibly know them all. How could they?
CPA's typically specialize in corporate tax code, and
are often short sighted when it comes to tax deductions
for home-based business owners. But I now have my
home business tax-guide that lays out exactly what
deductions I can take and cites the tax code for
each one.
Thankfully, the law allows me to revise previous tax
returns, so I was able to save a bundle of money,
money I thought was gone. My point to you is this:
The likelihood is great that you, too, have overpaid
your taxes and are not even aware of it. How much?
According to what I read, the average home-based
business owner overpays $1,000 to $2,000 in taxes
every year. But the IRS is not about to refund what
we overpay without us asking for it through an
amended tax return. When you add in the interest
that tax money is earning and refunded with your
overpayment, the average refund is more like
$3,000 to $6,000.
From my experience, do not trust anyone doing tax
preparation who is not intimately familiar with home-
based business tax deductions and tax strategies.
They could cost you thousands of dollars if they are
not up on home-based business tax law, no matter
how many initials they carry after their name.
Congress knows that small business is the engine
that runs our nation's economy. To encourage small
business, Congress has passed legislation giving
huge tax breaks to people who invest in a small
business. Your network marketing enterprise places
you squarely into that small business category.
That fact presents another problem for many part-
time network marketers, because they do not think
they have earned enough money from their business
to qualify for tax deductions. This erroneous thinking
is costing them literally thousands of tax dollars.
When I do business seminars, I hold up a Distributor
Application and romance it. Why, because just the
act of signing that piece of paper qualifies us as a
home-based business owner; one who is now eligible
to claim thousands of dollars in legally authorized
tax deductions; deductions we could not claim
before signing that piece of paper.
Profit or loss is not the criteria, it is our intent to make
a profit that allows us to claim deductions year after year.
No matter how you view your business, this is your
money. So it should behoove you to learn what you
can about minimizing your tax liability.
You should do so for yourself, and then for others.
How much more good could we do if learned how to
keep tax dollars at home? How much more could we
do for others if we taught them the same?
Jim Lynn is the author of, "Real World Secrets Behind
America's Most Successful (And Profitable) People
Who Network." Website: http://peoplewhonetwork.net
 Continue for more related information:
|
|