If you have hired your child or grandchild this summer
grandchild this summer (as
described in Ch. 6 of “Home
Business Tax Savings, Made
Easy!”) consider contributing
to a Roth IRA for him or her also.
The rule is this: You can con-
tribute up to $5,000, but no more
than the child’s earned income.
What you put in as a parent or
grandparent counts toward the
$13,000 annual gift tax exclusion,
BUT if your employment agreement
with the minor stipulates that the
contribution will be made as an
employee benefit, your contribution
is deductible as a business expense,
not a family member “gift.”
Look at the math --- If a one-time
$5,000 Roth contribution to a 16
year old earns a modest 8% annually
(compounded, of course), it will grow
to $217,000 by the time that “child”
turns 65.
Did you get that? $5K put in one-time
for a 16 yo turns into nearly a quarter
of a million dollars by the time they
reach retirement age.
The rules say you contribute up to
$5,000, but not more than their
earned income -- but a minor can
earn up to $5,800 tax-free!
They could end up with $5,800 in
tax-free earned income AND $5,000
deposited into their Roth account.
Withdrawals after age 59½ are
tax-free, as are earlier withdrawals
if they used to purchase a first home.
What if you could make 60 bucks just for referring people to a free video
Isn’t it true that we are entrepreneurs
because we like “doing well by doing
good?” For us, making money is, of
course, important – but making money
is a byproduct of helping others, right?
What if you could make 60 bucks just
for referring people to a free video that
might just be life-changing for them?
No strings attached. Just watch it for
nine minutes. That's it.
What’s the worst that could happen?
They might blow 9 minutes out of their
entire lifetime.
What’s the best that could happen?
They just might learn something that could
change their financial life, and maybe even
change their ZIP code.
I’m not talking about “selling,” I’m talking
just about “informing.”
SO WHERE’S THIS ‘VIDEO’ AND HOW
CAN YOU MAKE $60 TELLING PEOPLE
WHERE TO WATCH IT?
The 9-min video (actually, it’s a slide show)
is called “The #1 Secret to Slashing Your
Taxes in Half.” The “secret” of course, is
to run a home-based business, because of
all the special tax deductions Congress has
approved for only home-business owners.
At the end of the free video, the viewer is
offered a 99-cent audio, which promises to
reveal the six biggest tax breaks available
to home-business owners.
Who’s going to say no to that, right?
Here’s where your 60 bucks comes in…
The 99-cent audio comes bundled with a
Free Trial Membership in my Tax Savings
Secrets Club (TSSC) which gives them a new
tax-savings secret every week for 26 weeks.
They get the first 3 weekly ‘secrets’ for free.
Then they decide if they’re worth about 7-bucks
a week. If so (as most people do), they opt to
continue and we begin billing them $27/month
for 6 billing cycles.
You get $10 out of each of the six monthly
$27 payments, for a $60 payout over 6 months.
Refer 20 people to a free video – you collect $1,200.
Refer 50 people to a free video – you collect $3,000.
Refer 100 people to a free video – you collect $6,000.
When people learn what’s on the 99-cent audio, and
then learn what's in the first three powerful (free!)
Tax-Savings Secrets, most of them will continue.
Why? Because the value is huge!
Okay, ready to “do well by doing good?”
STEP ONE:
Become one of my affiliates (it’s free, of course) at
http://homebusinesstaxsavings.com/Referral_Rewards.html
Within seconds, you will receive a unique Affiliate URL
by email.
STEP TWO:
Tell everyone to (a) click on your affiliate link (or to
paste it in their browser) – which takes them to the
homepage of www.HomeBusinessTaxSavings.com –
and then (b) watch the free video offered at the top-right
of the homepage.
THAT’S IT!
There is nothing else for you to do!
For those who accept the 99-cent offer, and then
continue their TSSC membership, you will earn a
$10 commission every month for all 6 months
(assuming they don’t cancel, which they are free
to do at any time).
Can making money get any easier than that?
If you are already an affiliate, you are ready to start.
If you are not yet an affiliate, sign up right now at
http://homebusinesstaxsavings.com/Referral_Rewards.html
Dear IRS, Please take me off your mailing list
In a famous Charlie Brown cartoon,
Charlie is sitting at a typewriter
pecking out a letter saying,
“Dear IRS,
Please take me off your mailing list.”
About 20,000 taxpayers will be on
the IRS’s randomly selected mailing
list soon BUT THAT’S NOT A BAD
THING!
These 20,000 letters from the IRS
are not letters to be feared because
they are not audit notices.
WHAT ARE THEY?
Those 20,000 envelopes contain
surveys that ask taxpayers to
estimate how much time and money
you spend on matters relating to
complying with income tax requirements
-- recordkeeping, tax planning, tax
return preparation, etc., etc.
An additional 24,000 surveys will go to
‘business’ filers such as corporations
and partnerships.
WHY THE SURVEYS?
Be assured that the reason is NOT that
the IRS cares.
My guess is that there is a Congressional
committee that wants to simplify the current,
outrageous tax system, and they have the
IRS collecting proof of how onerous the
current, convoluted, unmanageable Tax
Code is, so that it can be simplified.
WHAT SHOULD YOU TO DO IF
YOU GET ONE OF THESE SURVEYS?
1. Do not ignore it. This is YOUR chance
to help do something about tax simplification.
Here’s how…
2. When estimating the time it takes YOU
to comply with the outdated, overly-complex,
unfair tax reporting requirements do NOT
under-estimate the time tax it takes you
to deal with it. I’m not suggesting you
‘exaggerate’ the time it takes you; I’m just
saying…
3. When filling out the questionnaire,
remember the purpose of this exercise --
to provide proof that our tax system needs
to be overhauled and simplified.
If YOU get one of those 20,000 surveys,
please take the time help provide that
“proof.”
It is rare that an individual taxpayer gets
the chance to “weigh-in” on the important
and overdue need to simplify the Tax Code,
but 44,000 individuals and small business
will get that chance soon.
Don’t waste your chance to “vote.”
AUDIT-PROOF yourself
“AUDIT-PROOF” yourself is to know
what questions an auditor may ask,
and to make sure you are maintaining
records that will answer them.
How can you know the questions
they will ask?
IRS “Audit Techniques Guides”
are industry-specific booklets that
tell IRS auditors how to conduct
audits of taxpayers who are in
specific types of businesses. They
have different guides for different
businesses.
Think of them as the “teacher’s
guide to the test answers.”
These documents are not 'classified,'
yet the Internal Revenue Service (?)
“sometimes forgets” to provide the
“service” of telling taxpayers they exist.
IF YOU ARE AN ATTORNEY,
OR IF YOU KNOW ONE….
Tomorrow the IRS will issue to auditors
a new Audit Techniques Guide, this one
for auditing LAWYERS.
You might want to download a copy
now, because in the past I have seen
these documents mysteriously vanish
from the IRS website without notice.
Here’s where to get the unabridged
Guide – the same one IRS auditors
will be issued tomorrow:
http://www.irs.gov/businesses/small/article/0,,id=241098,00.html
IF YOU ARE IN MLM or DIRECT SALES—
The IRS website currently does not show an
Audit Techniques Guide for the MLM or
Direct Sales industry, but I have a copy of
one from a few years ago.
To read it or download it:
1. Visit www.HomeBusinessTaxSavings.com
2. Look under “Resource Center” (on left of page)
3. Click on top drop-down, “Free and Low Cost Info”
4. Look under “Newest Informational Links”
5. Select “Audit Guide for Taxpayers in MLM and Direct Sales”
NOW WHAT???
Now that you know what QUESTIONS they
will ask, and what DOCUMENTATION they
will demand to see, you can make sure you
are keeping the right records.
The easiest way I have found to keep bullet-
proof records is by using a system called
Certified Tax Advantage (CTA). I have
arranged for you to get a 2-week free trial;
then, when you know you want to keep
using it, you will receive a 40% discount
(for life) slashing your membership dues
to just $14.95/month (tax-deductible).
To accept this offer is to visit:
http://www.homebusinesstaxsavings.com/CTA.html
Tax law requires taxpayers to be able to
prove they qualify for every deduction they
claim. Without adequate records, you can
lose ALL of your deductions – and that
would prove to be VERY costly!
You have invested the time to learn about
the special tax deductions available specifically
to home-based business owners – now don’t
risk losing them due to poor records.
Maintaining IRS-compliant records can be
done in as little a 4-5 minutes a day.
Want to get a tax deduction for your lift tickets and other expenses?
If you are a skier there is plenty of ski
season left, especially in the west.
Want to get a tax deduction for your
lift tickets and other expenses?
Here’s how…
Invite a business contact who would
qualify under the criteria described in
Chapter 10 of “Home Business Tax
Savings, Made Easy!” Be sure to
have a specific business objective.
Simply skiing with this person will not
qualify you for the deduction even if you
have a ‘legitimate business discussion’
while waiting in lift lines or on the gondola
or chair lift, because Tax Code Section
1.274-1(c)(7) says the discussion needs
to take place in a location that of “free
from distractions.”
HOWEVER, if you have your meeting
over lunch or snacks in the ski lodge,
the cost of the lunch or snacks will be
deductible as “entertainment expense”
AND the skiing itself is deductible
as Associated Entertainment.
Be sure to record the data the IRS wants
(see list in Ch. 10) in your day planner or
in your CTA online recordkeeping system.
GOOD NEWS FOR PROCRASTINATORS
been extended by three days – you
have until midnight Monday, April
18th because of Emancipation Day,
a holiday observed in the District
of Columbia, which falls on Apr 15.
By law, District of Columbia holidays
impact tax deadlines in the same
way that federal holidays do.
SERIOUS PROCRASTINATORS-
YOU CAN GET AN ADDITIONAL
SIX MONTHS TO FILE 2010 TAXES
If you file for an automatic extension
you will have until Oct. 18 to file
your 2010 tax returns. You do that by
filing a Form 4868 – “Extension of Time
to File Tax Returns.”
Acceptance by the IRS is automatic.
BUT if you will OWE Uncle Sam money
for 2010 taxes, he still wants your
check in the mail by 4/18.
In some extreme hardship cases you
MAY be able to get an extension of
time-to-pay by filing a Form 1127.
But submit that form asap, because
IRS approval is NOT automatic.
WHERE YOU CAN GET THE
4868 & 1127 FORMS?
RECORD THOSE NUMBERS IN TWO PLACES
RIGHT NOW, before you forget
check the odometer reading on any
personally owned or leased car(s) or
truck(s) you use for business purposes.
RECORD THOSE NUMBERS
IN TWO PLACES …
1. On your Dec. 31, 2010 calendar page,
record the number as “Ending Odometer
Reading for 2010.”
2. On your brand new Jan. 1, 2011 calendar
page, record the same number as “Beginning
Odometer Reading for 2011.”
You will need those numbers to maximize
your business-use vehicle deductions.
NEW 2011 “VEHICLE-USE LOG” IS
NOW AVAILABLE – Free, of course
The new 2011 Vehicle Mileage Log now
available as a free download in the “Resource
Center” at http://HomeBusinessTaxSavings.com
The Standard Mileage Rate (SMR) for 2011
deductions will be 51-cents per business mile,
up 1¢/mile from 2010.
REMINDER:
90-Days of Records = 365 Days of Deductions
As discussed in detail in Chapter 8 of “Home
Business Tax Savings, Made Easy!” most home-
based business owners are only required to keep
records for just 90 days, which h the IRS will
accept as a “sampling period” for claiming tax
deductions for the entire year.
Not everyone qualifies, although most home-
business owners do. Review Chapter 8 to make
sure you qualify.
Congress Just Gave a HUGE Christmas Gift to American Taxpayers
A massive tax bill has just been passed by
Congress. It is called the "Tax Relief,
Unemployment Insurance Reauthorization
and Job Creation Act of 2010” (HR 4853).
A COMPLETE SUMMARY is available at
www.HomeBusinessTaxSavings.com
Look for “Resource Center” and click
on “Free Downloads.” Then select
“Job Creation Act of 2010.”
Here are some of the highlights...
EXTENDED THROUGH 2012, are...
All current Personal Income Tax Brackets
Current Capital Gains and Dividend rates
Current modified Child Tax Credit
Currently expanded Dependent Care Credit
Currently increased Adoption Tax Credits
Current Earned Income Tax Credits - 3rd Child
Currently expanded Coverdell Accounts
Currently expanded inclusion for
Employer-Provided Education Assistance
Currently expanded Student Loan Interest
Deduction
Current American Opportunity Tax Credit
Deductions for State & Local Sales Taxes
DELAYED until at least 2013, are...
Personal Exemption Phase-Out -- delayed
Itemized Deduction Limitation -- delayed
Marriage Penalty -- delayed
"AMT" gets 2-Year “PATCH”
Alternative Minimum Tax exemptions will be
increased for 2010 and 2011.
New rates are:
2010 - $47,450 exemption for Individuals
$72,450 exemption for Joint Filers
2011 - $48,450 exemption for Individuals
$74,450 exemption for Joint Filers
"BONUS DEPRECIATION" is BACK!
Jan. 1, 2010 through Sep. 8, 2010
The 50% Bonus Depreciation for purchase of
capital expenditures, which expired 12-31-09,
was reinstated for 2010, retroactive to 1-1-10.
Sep. 9, 2010 through Dec. 31, 2011
The Bonus Depreciation deduction increases to
100% for assets purchased after Sept. 8, 2010
through Dec. 31, 2011.
Jan. 1, 2012 through Dec. 31, 2012
The Bonus Depreciation deduction reverts back
to 50% for assets purchased during calendar
year 2012.
UNEMPLOYMENT BENEFITS Extended
Emergency Unemployment Compensation
has been reauthorized for one year.
PAYROLL TAXES REDUCED for 2011
The portion of Social Security taxes paid by
EMPLOYEES, will drop from 6.2% down to
4.2% -- for calendar year 2011 only -- on
all wages earned up to $106,800. (Employers
will still continue to pay the current 6.2%.)
SELF-EMPLOYED people will pay 10.4%
in 2011 -- down from 12.4%
TAX DEDUCTION LIMITS ON GIFT-GIVING – – AND HOW TO AVOID THEM!
The tax deduction limits on business gifts
hasn’t changed in years – it’s still only
$25 per person, per year.
BUT…
There is no fixed limit on gifts to companies.
If business associates Jan and Joe Jones
operate their business as “Jones Enterprises,”
address the gift to their company name, and
sign the card with your own name, followed by
“and all of us here at <insert your business
or company name>.”
There is no fixed limit on deducting the cost
of this gift, because the recipient was not an
Individual, but a Business.
HOLIDAY CARDS CAN
ALSO BE DEDUCTIBLE!
The cards themselves, and the postage to
deliver them, are both deductible if your
business name appears inside the card
above or below your signature.
2011 VEHICLE DEDUCTION RATES TO BE ANNOUNCED THIS WEEK
These 2011 Standard Deduction Rates
for use of personal vehicles for business,
medical, moving or charity purposes, will
be announced by the IRS next week --
Business: 51¢/mile (up from 50¢ in 2010)
Medical: 19¢/mile (up from 16.5¢ in 2010)
Moving: 19¢/mile (up from 16.5¢ in 2010)
Charity: 14¢/mile (no change from 2010)
Get your FREE 2011 Vehicle Mileage Log
now available in the “Resource Center” at
www.HomeBusinessTaxSavings.com
