Monday, November 1, 2010

Tax Benefits of having a Home Based Business

Hey Guys,
This is a great BLOG post done by Barbie Decker, one our Team Beachbody's Leaders.  It has great information on why becoming a coach makes sense in the financial side of it.  I want to acknowledge her research and proving us with this great information that we all can use, even if our home based business is not with Beachbody.  Do with it as you will, but let me tell you if all of a sudden you have the urge to join Beachbody after reading this, please join my team...I am here for you to help you start your business :)

Why You Would Be Brain Dead NOT To Start Your Own Business - By Barbie Decker
Dear Boys and Girls,

I have said this many times before: I became a coach because I simply wanted to help people; I enjoyed helping others with their meal plans; being a motivator. I never intended to make a dime. Today, I have nearly quadrupled the income I make as a university professor and without hesitation, I can say that I expect that figure to double by the end of next year. My love of fitness, my knowledge, my confidence, and my desire to help others change their lives has only grown with time. The desire to help others has expanded to include both the physical and financial realms. I am living my dream.

If someone would have told me when I became a coach three years ago that I’d be reading (BY CHOICE ) a book on taxes on this lazy Sunday morning, I would have insisted that they had me confused for someone else. But now, as an independent contractor making real money, I want to take charge of my finances and learn how to keep the money I work hard to earn. Tax expert Sandy Botkin insists that “you will never get rich until you learn to get your taxes down to the legal minimum.” Well, I intend to do so!

Even though I have been a coach for three years now, I was not fully aware of the tax benefits that come with owning your own home-based business. I do now and I feel compelled to share this with you. If you are a coach, it’s time to start getting informed by picking up Botkin’s book: Lower Your Taxes Big Time. If you’re not a coach yet, but are looking to make a difference, earn a second income, and lower your taxes BIG TIME, then this post is for you! I invite you to join my team!

The title of the first chapter in Botkin’s book?

“Why You Would Be Brain-Dead Not to Start a Home-Based Business (If You Don’t Already Have One)

If this chapter title doesn’t capture your attention as it did mine, then I would say to stop reading right here! Really!

I learned that there are two sets of tax laws in the United States: one for employees and the other for small and home-based business people. There are huge benefits to falling in the second category. By starting your home-based business as an Independent Beachbody Coach, you can save thousands of dollars in taxes. Sandy Botkin explains:

“In addition to the tax deductions employees can get, small business people can deduct, with proper documentation, their house, their spouses (by hiring them), their business vacations, their cars, and food with colleagues. They can also set up a pension plan that makes any government plan seem paltry by comparison and deduct most their ‘vacation’ trips if they combine them with an appropriate amount of business” (3).

Okay, so what if you don’t make any money your first year or if your business produces loss the first year or so?

It’s still win-win!

Why? Botkin explains that you can use that loss against any other income that you have (6). In other words, the loss produced with your home-based business can be used against “wages earned as an employee, dividends, pensions, or interest income, or against your spouse’s earnings if you filed a joint return” (6). She gives the example of a woman named Lori who brought in $20,000 with her regular job. She took home $1,112 after she deducted all her work-related expenses such as taxes, car expenses, child care, lunches at work, and business attire. But, get this: she “could have netted the entire $20,000 had she earned it in a home-based business. This is an increase of almost 18 times her take-home pay as an employee.” I’m really not a numbers girl, but I get this!

What made me wake up to the incredible benefits of being a home-based business owner and of being well-informed? I was ready to fork over thousands of dollars in taxes on October 15th (the cut-off date for late taxes) until that very morning, my boyfriend Jason Diebold told me his tax REFUND equaled $14,000. I literally started sobbing on the treadmill when I heard the news. Within an hour of working with my itemized list, he was able to turn my amount owed into a nice refund. All because I am a coach and because he had done his homework. Knowledge and action are power!

Some of the reasons more and more people are deciding to go into a home-based business or become consultants go beyond the awesome tax benefits. Among these include:

No commute (all my commutes are centered around my own needs and desires, or those of my dogs!)

No boss

little if any chance of lawsuits

much less overehead, such as rent (and any overhead as a coach for me has been tax-deductible)

no employees (when the time comes and you need to hire an assistant, you won’t be complaining!)

no licensing

So: What will determine your success or failure in this business as an Independent Beachbody coach? Take a guess? It’s you! Beachbody is a solid company with $400 million in revenue this year. It has been around for more than 12 years.Entrepreneur Magazine rated Beachbody 69th in its list of the 500 fastest growing companies in the country. More than ever before, Beachbody has all the tools and resources you need to succeed. As one of the top leaders in the country, I can help you make coaching what you want the it to be if you are willing to do what it takes. Here is what Sandy Botkin has to say on what determines your success:

“Reasearch has consistently shown that it is rarely the business that determines success or failure. It is usually the business owner. Why does one person succeed and another fail at the same business? Two words: knowledge and action. Some people want the benefits of having their own business, but they don’t take action. The result is business failure. Then there are the people who are always working. They take action all day but still fail. The reason is that they are not taking the correct actions, the knowledgeable actions that will bring the desired results…[M]any people quit before they acquire through experience the knowledge that they need–and also realizing that they are getting substantial tax breaks” (8).

So: Are you going to stay in the first tax category, for employees? Or are you going to join me in the second, the one for small and home-based business people?

The choice is yours. It’s always yours!

To our success,

Barbie Decker, PhD

No comments:

Post a Comment