Home Business Tax Saving Calculator
Here is just an example of how a home business can help you save big on your taxes.
Here is just an example of how a home business can help you save big on your taxes.
HOME BUSINESS TAX SAVING CALCULATIONS
Here are the known parameters.
Family of 5, married, filing jointly, gross income is $85,000.
Show NO "profit" the first year because all profits are used to build the business.
All employed children are at least 8 years old. ($3,650 per child was used in this example, however, $5,450 is the max to avoid paying tax on them also.)
Use your tax savings to invest in your business.
The business use of your home (FORM 8829) is automatically calculated in to the equation. (10% of your home is used to calculate your deduction.)
Use a small sign on the car(s) and deduct 1/2 of the mileage driven to advertise the business.
13.2% tax rate was used for this example. However, taxation rates range from 9.9% to 17.7%.
SCH "A" itemization is limited if you make over $156,000.
Exemptions are limited if you make over $117,000. 2008 is $3,500 / person.
If you reduce your TAXABLE INCOME TO '"ZERO" with your home business you'll could get ALL the child tax credit refunded to you. This equals $1,000 per child.
A negative amount in "TAX OWED" means you'll get a refund when you file your 1040.
Family of 5, married, filing jointly, gross income is $85,000.
Show NO "profit" the first year because all profits are used to build the business.
All employed children are at least 8 years old. ($3,650 per child was used in this example, however, $5,450 is the max to avoid paying tax on them also.)
Use your tax savings to invest in your business.
The business use of your home (FORM 8829) is automatically calculated in to the equation. (10% of your home is used to calculate your deduction.)
Use a small sign on the car(s) and deduct 1/2 of the mileage driven to advertise the business.
13.2% tax rate was used for this example. However, taxation rates range from 9.9% to 17.7%.
SCH "A" itemization is limited if you make over $156,000.
Exemptions are limited if you make over $117,000. 2008 is $3,500 / person.
If you reduce your TAXABLE INCOME TO '"ZERO" with your home business you'll could get ALL the child tax credit refunded to you. This equals $1,000 per child.
A negative amount in "TAX OWED" means you'll get a refund when you file your 1040.
NOTICE: TALK TO YOUR TAX ADVISOR ABOUT YOUR SPECIFIC SITUATION.
DISCLAIMER: THIS IS FOR INFORMATION PURPOSES ONLY!
DISCLAIMER: THIS IS FOR INFORMATION PURPOSES ONLY!
TAX PROFILE WITH A HOME BIZ
Remember, this is JUST an example. You must consult the IRS or a your tax advisor to get a full understanding of the tax ramifications for your home business.
Please feel free to contact me directly to get some questions answered about your particular network marketing business, your marketing plan, or whatever.
If you have a question or comment please feel free to contact me.
To Your Tax Saving Success,
Brad Mirtes
Marketing & Business Consultant
Please feel free to contact me directly to get some questions answered about your particular network marketing business, your marketing plan, or whatever.
If you have a question or comment please feel free to contact me.
To Your Tax Saving Success,
Brad Mirtes
Marketing & Business Consultant
TAX PROFILE WITH NO HOME BIZ
This is money you already spend on everyday items.
All amounts are annual. Use of 2008 Tax Expmtions and Mileage Deductions.
All amounts are annual. Use of 2008 Tax Expmtions and Mileage Deductions.
| TOTAL WAGES | $ 85,000 |
| + Sch "C" Home BIZ | $0 |
| = Adjusted Gross Income | $85,000 |
| - Sch "A" Itemized Ded. | $21,400 |
| - Exemptions ($3500) | $17,500 |
| = Taxable Income | $46,100 |
| Total Income Tax Owed | $6,129 |
| - Child Tax Credits | $3,000 |
| = FED TAX OWED | $3,129 |
| Total Taxable Income | $85,000 |
| Total Dependents | 5 |
| Children - 8 yrs or older | 3 |
| Mortgage Interest | $14,400 |
| Property Tax | $2,000 |
| Yearly gifts to charity | $5,000 |
| Yearly TTL Car Mileage | 32,000 |
INCOME TAX OWED - NO HOME BIZ
$3,129
Every Month You'll Have BIG BUCKS Withheld From Your Pay Check To Pay Federal Income Tax.
$3,129
Every Month You'll Have BIG BUCKS Withheld From Your Pay Check To Pay Federal Income Tax.
Two cars driven 15,000 miles each.
Use This Money To Start Your Own Home Business.
TOTAL BIZ BUDGET is "approximately" equal to the tax owed when there was no home biz.
Use the money you save on tax and spend it on your home business.
All amounts are annual.
All amounts are annual.
All of these expenses are tax deductable, and included on the Sch "C" form.
| Tuition / Sign-Up Fees Training / Start-Up Cost |
$1,500 |
| Advertising | $1,200 |
| Web Hosting | $100 |
| Autoresponder | $120 |
| Office Expense | $100 |
| VOIP Phone | $100 |
| TOTAL BIZ BUDGET | $3,120 |
| TOTAL WAGES | $ 85,000 |
| + Sch "C" Home BIZ Click The ($amount) To See How I Come Up With This Amount |
($25,020) |
| = Total Income | $59,980 |
| - Sch "A" Itemized Ded. | ($21,400) |
| - Exemptions | $17,500 |
| = Taxable Income | $23,080 |
| Total Tax | $3,000 |
| - Child Tax Credits | $3,000 |
| = FED TAX OWED | $0 |
WITH A HOME BIZ
$0
$0
