Can Starting a Small Business Help Lower Your Taxes?

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Can Starting a Small Business Help Lower Your
Taxes?
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• Did you know that the IRS allows you to deduct as
  much as 10,000 from your personal taxes in the
  year before you open up a company? Then, as if
  that werent reason enough to come over all
  entrepreneurial, in the same year that your
  business starts, you are also permitted to deduct
  additional ongoing expenses, including home
  offices, transportation, advertising costs,
  travel and so on.
• So, while the simple answer to the question of
  whether starting a small business can help you
  lower your taxes, is undeniably yes, it is a
  little more complex than that. Lets take a
  closer look

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• How is a business for tax purposes defined?
• Provided you carry on the activity for the
  production of income from selling goods or
  performing services and the IRS are satisfied
  with this, theyll define your company as a
  business.
• If youre a start-up entrepreneur, its important
  that you define your business as ongoing trade,
  and not as a hobby, as any expenses associated
  with a hobby are not allowed tax deductions.

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• Proving that your business is not a hobby
• If your business made a profit for any three of
  the past five consecutive years, then your
  company is definitely a business, not a hobby
  this is the rule used by the IRS when determining
  profit motive. This means that you should avoid
  claiming a loss for the third year in a row,
  otherwise you risk triggering an IRS audit.
• You can also provide evidence to the IRS that
  youre trying to make money, when proving that
  your company is more than a hobby. You can use
  your website, accounting books and separate bank
  account to do this.

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• Business ideas to get easy tax write-offs
• Below are some of the most common types of
  business ideas that you can use to help
  successfully reduce your taxes
• Consulting you can base your consulting company
  from home if you choose, and travel to your
  customers, or you can operate your service over
  the telephone and internet. Costs youre able to
  deduct for tax purposes, are home office space,
  telephone lines, internet access fees and
  computer equipment.
• Internet services from designing websites and
  coding, to programming and e-commerce stores,
  there are plenty of services you can offer
  customers related to the internet.

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• Artisan with the ability to deduct expenses for
  materials and supplies, and travel to fairs and
  exhibitions etc. by starting a business creating
  handmade arts and crafts to sell in galleries,
  craft fairs and online, you can lower your tax
  burden.
• General services this can range from
  hairdressing and massage, to event planning and
  tutoring, and because youre allowed to deduct
  all your equipment, tools and material costs etc.
  its a great way to save on your taxes.

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• Want to know more about starting a business and
  reducing your tax burden? Schedule a free initial
  consultation with an accountancy firm who
  specializing in helping start-ups and other small
  businesses get up and running, and start saving
  money on your taxes.
• At Heyer Inc, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax services Miami. If you
  are looking for an individual accountant in
  Miami, heyer inc would be a right option.