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Make the Most of Being Self-Employed
You know, America is a great country! Where else can you work from home, do what you love, and have the ability to deduct every cent that it costs you to do it? The only requirement is that you keep track of it all. For many of us, therein lies the problem. Many people go into business looking forward to doing the thing they love or the thing they do best. Most people have no idea how many other things they have to do that they don’t love and don’t do best.
If you look at it from a different angle, from the benefit angle, you might just change your attitude about it. As with everything else in our lives, we need to take the good with the bad. You can’t ignore it – you could go broke or you could get in trouble with the government. The trick is to see the good side of the bad.
From the benefit side, there are many. Aside from the obvious one – you are your own boss – what other benefits does this lifestyle provide? I think one of the greatest benefits of owning my own business is I get to learn more about this thing that I love – and it reduces my tax bill at the same time! Sure, I have to take the time to record the expense, but think about it. Record the expense and lower your taxes. It’s a direct cause and effect – lower your income, lower your taxes. How easy is that? So many people say “But it takes so much time!” It’s true – it does take time, but how much really? Quite a few people have told me they don’t keep track of their mileage. In 2005, I drove 9,147.5 miles for my business. The reduction in income I realized was $4,179.24. That’s quite a chunk of change! Not bad for just writing down my mileage before and after every business trip. So, let’s break that down. If each of these trips averaged fewer than 10 miles each, that would mean I had to keep track of approximately 900 trips (for easy math). If it takes me 30 seconds to write down my mileage at the beginning and end of each trip, I would have spent 450 minutes keeping track of this mileage throughout the year – which translates into 7.5 hours. This means that I made $557.23 per hour for the time I kept track of my mileage. Where else can you make that kind of money? It’s like giving yourself a year-end bonus!This is just one way you can be a smart businessperson and make the most of your opportunities. If you can accumulate over $4,000 at $.445 per mile, think of what you can accumulate by keeping better track of all your expenses!! Once you start keeping track of these things, it becomes a competitive thing – like clipping coupons (don’t you wonder how those people on TV get two carts worth of groceries for $12.54?) – or finding the lowest sale price – or buying something that started out costing $195, but you waited until it went on clearance and you got it for $22. You could be pocketing these savings just like you could be pocketing the taxes you would have to pay if you hadn’t kept track of all those “little” expenses. Now there’s a return on investment for you!It’s like I always say – If you keep track of the little things, the big things will take care of themselves. Give your record keeping 100% – it might just reward you back at an even higher rate!
Submitted by: Doralee Billings