How Uncle Sam Helps You Buy A Business

Actually, your business will cost you NOTHING if you factor in the tax benefits you will enjoy for the next 5 years or longer:

Assuming you are in a 30% or greater federal and state tax bracket here are the projected tax benefits you will enjoy over the next 5 years. In some high tax jurisdictions such as NY, CA, ILL, MA, CT and others the full benefits will kick in just 2-3 years.*This message is directed at USA taxpayers but many of the suggestions may be useful in other jurisdictions.

The very best way to save on federal and state taxes is often to own a business in which you can conduct much of your business life. Here are just a few.

First, when you buy your five or more store package from Citadel Builders you will receive an itemized invoice for the full price you paid. If you paid $6997 for your stores the full amount will be invoiced as PAID to you.30 Assuming you are in a combined state and federal tax bracket of 30% that saves you more than $2000 in federal and state taxes.

Assuming you operate your business from your home? The majority of online entrepreneurs do, and that entitles them to take some significant tax deductions if you meet certain IRS conditions. 

For one, your home office must be used “exclusively” and “regularly” for business use. That means the primary purpose of that space is for business, such as contacting clients or managing your books. It also means that the space is not used for family or personal activities, unless you want to start dividing up that time by saying 75 percent of the time the home office is used for business and 25 percent of the time it’s used for playing games or doing homework.

The second IRS stipulation is fairly easy for most online business owners to meet: Your home office must be your “principal place of business.” Essentially, that phrase just means that the business activities you conduct in your home office can’t be conducted anywhere else, such as in a rented office space.

If you meet both of those requirements, then you can deduct many of the costs associated with your home, including property taxes, utility bills, insurance costs, mortgage or rent payments, even the cost maintaining your property. Of course, if your mortgage payment is $800 per month, you can’t deduct that entire amount if you only use a small portion of your home for business. You need to determine what percentage of your home is used as a home office, then you’ll use that figure to calculate the deductions you can take. For example, if your home office represents 10 percent of your home’s square footage, and your mortgage payment is $800 per month, then you could deduct $80 every month, which would be $960 for the year. The same applies to all the other expenses related to your home.

You do need to be aware of one thing when calculating these deductions: You can’t use them to demonstrate a net loss during that tax year. For example, if your online business generated $50,000 in revenue in 2004, but you could claim $60,000 worth of home business deductions that year, then you can’t claim a net loss of $10,000. Instead, you could only report zero net gain. However, you can carry that remaining $10,000 onto next year’s taxes to help you reduce your tax burden.

To calculate your home office deductions, you’ll need to complete Form 8829 and report that total amount on Schedule C. All of these forms are available online at the IRS’s website . Remember that you can also deduct other business expenses, such as the cost of owning your domain name, paying your web-hosting company, designing your website and accessing the internet. (These fees will have to be pro-rated, however, if your family or you use the internet for non-business-related activities.)

Citadel Builders will continue to provide you with all the services you need to run your ecommerce businesses. No need to hire employees, pay employee taxes, unemployment insurance,hiring hassles, or file numerous forms with the federal and state agencies. It’s all handled for you with one simple invoice detailed sent monthly. 

Meanwhile, you may wish to expand your business with business travel to meetings and conventions or anything else that is directly connected to running your business,including car expenses, which can be prorated, but nevertheless fully deductible.

There are many,many more tax advantages. If you want to see a full list then visit the ULTIMATE LIST OF SMALL BUSINESS TAX DEDUCTIONS. 

Over a period of five years you will be able to write-off at least a cumulative $15,000 or more making your purchase essentially fully paid by tax savings.Of course, you will have to pay  taxes on all income from your new business