The Ultimate Tax Shelter

Is owning your own business “The ultimate tax shelter?” According to this article at MSN Money it may be. Since we all have just finished with another tax season it is fresh in our minds how little you can actually deduct. Here are a few tips with my added comments. 1. Establishing a profit motive is key. A good way to attach this is to register with your state as a corporation or open a checking account such as Steve Mertz DBA (doing business as) Alpha Financial Speakers. Theoretically, a profit motive is established if you are profitalbe in three out of five years. But, one company had not made a profit in 20 years-but had a profit motive. 2. Your hobby can be your business. Suppose I was speaking as a hobby and I wanted to turn it into a business. Receipts are essential but I might also establish a blog, to show intent. I might also seek sponsors to establish my business motive. All of these will strengthen my case. 3.How to qualify as a business deduction. The big test here is reasonable and customary. In my case that would involve advertising, travel, lodging, meals, internet connection etc.. Just don’t be too adventurous in your write offs!

The whole idea is obviously to make a profit at sometime but keep good records of deductions and do seek professional advice in the tax arena.

Steve Mertz
Enjoying the Ultimate Tax Shelter!

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