Part of being in business successfully is being informed so you can make intelligent decisions for yourself and we do that in the site with the help of our former senior trial attorney for the IRS by way of a monthly tax newsletter especially written in an easy to read and understand format so you can stay ahead of the game.

I will mention a few here, but to get the full power of the knowledge available to you, it would be to your benefit to join our community of members as soon as possible. There is no better time to start than now, especially since it is the first of the year. We work hard to give you everything you need for a successful business, yet keep the price unbelievably low. You can do it month by month or by the year for your convenience. I can promise you that this tax deductible membership is peanuts compared to the value of the tax strategies available to you in the site. You will keep thousands more, stay informed and make sure your home business is on solid ground. We’ll take you from the basics to advanced tax and asset protection strategies in a simple, informative way. Just follow our experts.

Now, here are a few of the changes you might look out for;

Tax day has changes to April 18th for 2010.

Audit rates have quadrupled. Who do you think is targeted least, most?

There are new changes in social security. Some you may want to know about.

One student requested a verification because her accountant said she could help her son out with his education from her 401k. I guess in reality she could anything she wanted but her accountant was misguided. She had to pay the tax and penalty.

If you want a little hint about who is audited the least I will say, “those people savvy enough to use legal entities.” It’s not that hard. We will explain it all to you.

Staying informed is CRITICAL!

See you on the inside.

First of all, yes, it can be difficult, but it doesn’t have to be. Lots of seminar companies have made big bucks by selling large sets of tapes, CD’s and forms books to help in the process. Too bulky. Not my recommendation.

Secondly, why worry about it? The tax courts are full of people who didn’t worry about it or tried to interpret the tax code their own way. There really is NO reason for all that. And it pays huge dividends with a little effort on your part and some guidance from the right source to keep you on track. And, it doesn’t have to be expensive.

First, the have to’s or basics; (And this section will be brief)
Think a little like the IRS. They are just an accounting group.
• A separate place to work-Preferably exclusive use.
• A simple filing system to get you started. Get upgraded later.
• A separate phone
• Separate office supplies and equipment to fit your business.
• A simple accounting system- I would also recommend a tax planner/diary. It is like a daily planner but includes tax items. This could make the difference if you are ever audited.
All this is tax deductible and you will be organized.
Secondly, Beyond the basics.
• Set up a simple LLC for business operations.
• Learn dual corporate strategies.
• Learn to hire your children.
• Stay informed.
• Find authoritative support, no fluff.
• Replace the word vacation with business travel.
To name a few. I’ll expand on those next time.
Why go to all this trouble? Asset protection and deductions. Going from a few to a few hundred. Finding deductions is one of my favorite activities and you learn how to play the same game as the big boys. Except you will get more deductions.
One last thing-You’re overpaying your taxes every day you procrastinate.
See you next time.

The biggest problem is, “What are we doing to prepare for it the rest of the year? You can do it the hard way and not do anything until the annual threatening date of April 15th or you can be consistent and plan for it all year long by keeping good records.

Once you get things in place, it’s only a matter of reporting and if you have a daily planner/tax diary, that is with you all the time, it is even easier. It also makes a great audit proofing tool. And as the IRS is gearing up to do more audits, it would behoove everybody with any business dealings to use one. Then it is only a matter or transferring data at the end of the day or week.

Now, as I promised, let’s get back to the corporate structure and tax reduction. This may be a little advanced for the newbie, but I suggest everyone be familiar with it so when the opportunity arises, you will recognize it. With a little more work, the payoff is exponential, and I have seen this process work hundreds of times. I’m going to give you a structure a little beyond the basics. But I can only breeze over it here.

When I teach people, I generally start out with a Living Trust. A revocable one, so you can change it and have control. You should check over it at least once a year. You may be thinking, “My attorney made me a will, that’s all I need.” And wills have their place. But without going into much depth I will just say this-All wills in every state are public knowledge, are probatable and can easily be contested. Need I say more? A Living Trust is private, does not need an attorney to distribute assets at death and is the ideal instrument for holding your estate together. Wills are best when used in conjunction with a Revocable Living Trust.

Next, I encourage a management entity. A regular C-Corp. is the best choice for that. Corporate law has been around for more than 250 years. Everybody knows how they work, and unless your name is Rockefeller or Kennedy, it is not the place to put assets. Its only job is to manage other entities like LLC’s and LP’s which is where your assets go.
So, now you have three tiers:
1) Revocable Living Trust-Avoids probate, holds estate together.
2) C-Corp- Protect personal assets, reduce taxes, and more.
3) LLC or LP- Flow through for taxes, holds assets, do daily business.

Let me briefly tie it together for you: And this is just an over view.
The corporation is attached to the living trust for estate planning purposes. The corporation is a partner to the working entity, an LLC or LP. And here is one of the keys; you learn to integrate entities to maximize tax reduction, manage your own retirement plan, maximize asset protection and with the home business deductions you really can have your cake and eat it too.
If this all sounds a little confusing, it really isn’t, with some guidance. The most confusion comes when you do it in a foreign (meaning a state you don’t reside in) state. A no tax state. But well worth it. But that’s for another day. Maybe I’d better do a part IV.
See you next time.

In part one we talked about the necessity of staying informed to be successful and treating your home business like the real business it is. There isn’t much room any more to be passive about it. Having a home business is crucial to the survival of many thousands. So today, we are going to the next level.
First, although it may seem a little obvious, is, having a good solid foundation to do business with. Most people understand the basics of having a home office where one can work and create a business-like atmosphere and if you are going to claim the home office deduction it needs to be “exclusive use” meaning it must be all business. IRS auditors can be very tricky in their questioning and could even check out your computer for games. But think about this; once you have a good solid business foundation in place and are running it like a real business, the value lies in having the self-confidence and knowing you are doing it right and staying below the IRS radar, being able now to take full advantage of major tax deductions available, and using the business foundation for other businesses if you decide to make a change and all this adds up to never wanting to be without the structure again now you are learning to live the corporate life style.
Secondly, and this is my favorite part, learning to take the deductions you deserve. I have personally heard ex-irs agents say they have never seen anybody take all the deductions they are entitled to and “Americas #1 tax reduction strategy, starts with a home-based business.” These are both true, but, how does it all begin?
Usually the new entrepreneur starts with a sole proprietorship. That’s a fancy way of saying you really haven’t done anything yet. The liability and taxes all flow down to you, but one thing you can do is off-set your taxes and your spouses, if you are married, from your regular jobs. A nice way to start.
Once you start making a little money it’s a good idea to be thinking seriously about structuring your business with entities like LLC’s, Limited Partnerships and Corporations. Most people start with a simple LLC. The tax liability still flows to you but it gives you some liability protection and more tax deductions become available.
When you get serious about your business is when the fun begins. There are strategies for the more savvy business person that could take you up over 200 plus deductions and even teach you how to get money out of your business that is not taxed. What would you do with $10,000 non-taxed dollars? Think about it.
Yes, it is true. You can incorporate your home business and with some guidance you can literally take more deductions than major corporations because of it.
There is not enough space in these articles for lengthy explanations, but to wet your appetite and to close with, if you have a business like an MLM or internet business that does business in multiple states, you can set your business up in any state you desire if you are open to a little more work but wonderful advantages for asset protection and further tax reduction if you select a state that doesn’t have state taxes.
See you in part III where we will go into a little more depth.
Jerry McMullin is the founder of Home Business and Tax Solutions where he takes the mystery, difficulty and fear out of establishing a home business using video instruction from a top former IRS trial attorney and other professionals. His goal is to simplify the tax code pertaining to home-based businesses and simplify setting up the home business so the entrepreneur can confidently focus on building the business of their choice while easily saving thousands in taxes. Just follow the experts. http://www.homebusinessandtaxsolutions.com is designed for the serious entrepreneur.

Each personal or dependent exemption is now worth $3650, up $150 from 2008.

Standard deduction:
$11,400 for married couples filing jointly and qualifying widows and widowers.
$5,700 for singles and married individuals filing separately
$8,350 for heads of household
You may be able to claim a higher a higher standard deduction if you are 65 or older, blind paid state or local real estate taxes or sales or excise taxes on a new vehicle or were a victim of a federally declared disaster.

Alternative minimum tax exemption:
$70,950 for a married couple filing jointly and qualified widows and widowers.
$35,475 for a married person filing separately
$46,700 for singles and head of household

Home buyer credit:
Up to $8000 for first time home buyers for purchase made through April 30 2010
Up to $6,500 for long-term home owners for purchases made between Nov. 7, 2009
And April 2010.
To qualify, the home must be the primary residence. The credit begins phasing out for married couples filing jointly with modified adjusted gross incomes above $225,000 and for individuals with incomes above $125,000.

Energy efficiency credit:
30% of the cost of installing energy-efficient windows or doors, air conditioners or furnaces or other energy-saving improvements, up to a maximum $1500.

American opportunity Credit:
Up to $2500 to cover college tuition, fees and required course materials.
To qualify, the student may not have completed four years of college. There are also income limits.

Earned income tax credit:
The maximum was raised to;
$5,657 for people with three or more qualifying children.
$5,028 for people with two children
$3,043 for those with one child.
$457 for people with no children.

Retirement: If you’re covered by a retirement plan at work, the maximum modified adjusted gross income you can have and still take a deduction for IRA contributions rose to $65,000 – $109,000 if married filing jointly. The maximum deduction is $5000, $6000 if you were 50 or older by the end of 2009

Long-term Capital Gains Taxes:
0 percent if taxed in the 10 percent to 15 percent brackets.
15 percent maximum for taxpayers in higher brackets.

Mileage deductions:
55 cents for each mile driven for business
24 cents for each mile driven for medical reasons or part of a deductible move.
14 cents for each mile driven as part of charity work.

Be sure to double check all numbers before using them to complete your tax filings.
As you learned from the January issue of “Tax Talk”, the standard mileage deduction for business owners for 2010 went down 5 cents to .50. For medical and moving expenses the mileage deduction went to 16.5 cents, down .24 from 2009.
I hope this helps.