What can I write off? When can I write it off?

Be aggressive but Don't cheat!
I write this article to communicate the advantages of owning your own business other than the obvious. These Tax Deduction Suggestions are for all Home-based Businesses Independent Contractors and All Entrepreneurs. As long as your business is legit and you have the intention to make a profit now or in the future you can take advantage of these tips. Most people I have come into contact with when doing their taxes for the first time leave anywhere from 5% to 10% on the table for dear old Uncle Sam. Now I love Uncle Sam but if you are not aggressive with your deductions your giving away unnecessary revenue that can be put to better use by you.

Deductions
Some typical areas that you can be smart with write offs are auto expenses home office travel and entertainment and perks and benefits. Below is a brief explanation of how these deductions work and these expenses are now opportunities for you to be aggressive

• Auto Expenses- Actual expenses or standard mileage are the two areas you can write off the business use portion of the automobile. Actual expense are lease payments or the deprecation over 5 years if you purchase the care fuel insurance maintenance tires oil changes those smelly things you hang from your mirror I think you get the idea. No matter what area you write off "mileage or actual expense" keep a log book or write them on your calendar of the miles related to business. The log is easy where you started the trip and where you ended the trip. Add the miles monthly and then yearly. In 2005 the standard mileage write-off was $0.405 up until September and then $0.485 for the latter four months due to increased fuel costs. For 2006 the rate will be $0.445 per mile. Keep track of both expenses so at the end of the year you can take advantage of the greater. Your business related driving starts once you pull out of the garage no matter if you are going to the store not for business along the way.
• Home Office- Only the portion you use for business purposes is a write off. Tread lightly here. Your Uncle Sam will be flagged if you try to take advantage of using this deduction for your areas that you really do not use for business purposes. Dedicate a room for business purposes give your total square footage of your house and use a percentage of the square footage of the dedicated business space and determine the percentage you can use for the purposes of deductions. Using this ratio you can write off that percentage of expenses related to the house such as utilities and insurance.
• Travel and entertainment- Be aggressive here. 100% travel and 50% meals are write offs. Every meal or trip is a write off. If you are like most business owners you always talk shop. Just keep the receipt write the participants on the receipt as well as the names and contributions to your business discussions.
• Perks and benefits- What perks will your company provide? You own the business so you get to decide. Write off a portion of your health care your pension fund juices donuts coffee water soda exercise equipment. As long as it is used for your clients you and your staff it is open to write off.

Be aggressive but Don't cheat! The IRS is clear on what they label as expenses. They have to be "reasonable" "ordinary" and "necessary it offers no definition of what those terms mean as far as write-offs go. So it is up to you to be creative. These strategies will help offset the other expenses you have as a small business or home based entrepreneur. There are also other things you're entitled to deduct. This is why you should focus on what you do best and hire someone to do the accounting and taxes. It is not worth it to do your own taxes. You will think your saving money by not giving it to your accountant to do your taxes but most people leave money on the table by trying to save a buck. Oh and when you pay someone to do your accounting and taxes you can write that off!