Tax Advantages Of A Home Based Business

One of the most important, yet overlooked, advantages of having your own home based business is the tax advantages it affords you. IRS guidelines allow you to deduct business expenses from the revenue you generate BOTH from your new home based business AND you're the other income you generate.Most business do not generate a net profit in their first few years. In other words, by the time the business owner pays for his office rent, start-up costs, inventory, samples, utilities, payroll, transportation expenses, inventory, insurance, etc. there is no money left over for profit. This is normal in a start-up business. The idea of course is that as the business grows it will generate a profit for the owners. But in the beginning it's all expense and not much-- if any -- profit. The IRS recognizes this fact, and therefore allows the business to deduct these normal expenses from their revenue before any such revenue is considered taxable.The same rules apply to network marketing business. The best part is that many of items that the government recognizes as legitimate business expenses for your new home based business are things that you are currently spending anyway - but without getting any tax deductions. Part of you automobile expenses, a portion of your home that you use to operate your home based business, part of your utilities, "samples" of products or services that are sold by your network marketing business but that are consumed by you and your family are just a few examples of legitimate tax deductions the government allows you to take if you operate a network marketing company in which you "intend" to eventually make a profit. In the meantime, while your expenses exceed the amount of revenue you are generating from your new home based business, the tax deductions can be deducted from your regular W-2 income from your full time job.So start a network marketing business - and start paying less taxes to the government for everything else that you do. Always consult a tax professional for the details of what is legal and what may be stretching the law too far. But don't overlook the considerable advantages every home based business owner is entitled to. This is how people make rapid cash. They get to keep more of their money from the IRS.