Now, before you read this, we want you to understand that this is not a Shaklee sales pitch. This is about any home based business. Lisa runs two businesses out of our home—a Shaklee business and a Sewing business. Despite losing over half our income, running those two businesses has taught us volumes.
Looking back, I guess we were yuppies--both college grads with high paying jobs. But after Emma, our first, was born, we decided to shift our focus from career to family. In other words, we quit the rat race. Lisa stayed home. I started over at the bottom of the public school pay scale. Now, I won’t lie to you. It was pretty scary. I’m not exaggerating when I say we lost 70% of our income.
Now You Know Why. Do You Want to Know How?
With Lisa home, we don’t pay for child care. According to the Urban Institute, a nonpartisan economic and social policy research organization, most “working” families with at least one child under age 5 pay an average of $325 per month for child care, or 10% of their total earnings. That is an average. Many pay more than that. For many families, the child care expense is the second largest in their budget, after rent or mortgage.
We don’t commute. This saves us countless hours and dollars on gas and car maintenance.
We itemize and deduct (very legitimately I might add) the following from our taxable income every year: home office expenses, business equipment, office supplies (paper, envelopes, printer cartridges), Shaklee products, postage, internet and telephone service, software and subscriptions, mileage and other auto expenses, travel, meals and entertainment, business gifts, tuition and seminar education expenses, child labor expenses, furniture, energy expenses, lawn and garden expenses, home maintenance expenses, and accounting services (to help us find and file for every deduction possible under the law).
In short, we pay very little (if any) in state or federal income tax. The trick is documentation and understanding the Internal Revenue Code Section 162(a): “There shall be allowed as a deduction, all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.”
As business owners we have given ourselves an edge--an advantage that as regular “employees” we didn’t have. Now, by no means are we tax experts. We have simply become aware of the tax laws and deductions available to home business owners—and in doing so we have maximized our income.
Bottom Line . . .
Our home based businesses have given us the financial leverage to focus on our family in a way we never could have as traditional employees working two jobs . . . for someone else. And I have to tell you—the feeling of freedom is pretty cool.
Looking back, I guess we were yuppies--both college grads with high paying jobs. But after Emma, our first, was born, we decided to shift our focus from career to family. In other words, we quit the rat race. Lisa stayed home. I started over at the bottom of the public school pay scale. Now, I won’t lie to you. It was pretty scary. I’m not exaggerating when I say we lost 70% of our income.
With Lisa home, we don’t pay for child care. According to the Urban Institute, a nonpartisan economic and social policy research organization, most “working” families with at least one child under age 5 pay an average of $325 per month for child care, or 10% of their total earnings. That is an average. Many pay more than that. For many families, the child care expense is the second largest in their budget, after rent or mortgage.
We don’t commute. This saves us countless hours and dollars on gas and car maintenance.
We itemize and deduct (very legitimately I might add) the following from our taxable income every year: home office expenses, business equipment, office supplies (paper, envelopes, printer cartridges), Shaklee products, postage, internet and telephone service, software and subscriptions, mileage and other auto expenses, travel, meals and entertainment, business gifts, tuition and seminar education expenses, child labor expenses, furniture, energy expenses, lawn and garden expenses, home maintenance expenses, and accounting services (to help us find and file for every deduction possible under the law).
In short, we pay very little (if any) in state or federal income tax. The trick is documentation and understanding the Internal Revenue Code Section 162(a): “There shall be allowed as a deduction, all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.”
As business owners we have given ourselves an edge--an advantage that as regular “employees” we didn’t have. Now, by no means are we tax experts. We have simply become aware of the tax laws and deductions available to home business owners—and in doing so we have maximized our income.
Our home based businesses have given us the financial leverage to focus on our family in a way we never could have as traditional employees working two jobs . . . for someone else. And I have to tell you—the feeling of freedom is pretty cool.
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