MLM List Building Secrets

When you  start your Home Based Business in 2011, you can deduct up to $5000 in start up costs!  Incredible Government Stimulus For the US!

The IRS will pay you up to $5,000 of initial start-up costs of a home-based business! Uncle Sam will help pay for you to start your business with ViSalus!
The Stimulus ENDS THIS YEAR! So, if you are waiting until January to come on as a ViSalus distributor, this is the reason you DON’T want to do that!

Become a Promoter of the Body By Vi Challenge and you are eligible for these tax benefits. Click here to become a ViSalus Distributor.
Q. How are deductions for the start up of a home based business normally deducted?

A. Normally, costs incurred during the START-UP PHASE of a business are deductible over a 15 year period (i.e. each $1,500 in start-up costs would be deducted at a rate of $100 per year for 15 years). [IRC Sec 195(c)(1)(A)]

But there is a “Special Deduction” for 2011!

Any taxpayer who begins operation of a new business in 2011, may deduct ALL start-up costs (up to $5,000 maximum) on their 2011 tax returns – no need to spread the deduction over a 15 year period.  [IRC Sec 195(b)]

EX. $5,000 in Start-Up Cost deductions, for a person in a 28% tax bracket, would generate a $1,400 tax Refund.

If Start-Up Cost deductions exceed the amount of money earned this year in the home-based business itself, most or all of the additional deductions may be applied against any other source of income such as a W-2 job, which could possibly even drop the taxpayer into a lower tax bracket.

This one-time write off provision in the tax law is valid only during 2011, and therefore will set to expire permanently at midnight, December 31, 2011. Even IF Congress reinstates this provision in 2012, a business begun after Jan. 1, 2012 will not be able to claim those deductions until April 2013 – when 2012 Tax Returns are filed.

Not activating a new home-based business by December 31, 2011, will delay tax-deductions for Start-Up Costs by at least 15 months.

What are “Start-Up Costs”?

The term includes business related costs you incur prior to actually beginning to offer goods or services for sale – i.e., the costs of getting ready to open your business. They are generally the same types of expenses that will be called “business operating costs” once you are actually operating a business. [IRC Sec 195(c)(1)(B)]

The start up period starts when you begin THINKING about a home based business.  You were thinking about, and researching, and perhaps even taking the products as a customer.  All through 2011 you were thinking about starting a home based business, so you can deduct start up costs for expenses all year.

What are some examples of tax-deductible “start-up costs”? [IRC Sec 195(c)(1)(a)]

A. Seminars, Workshops, Courses and Books on how to run the business. Investigating or Researching one or more business opportunities. Travel for meetings, conventions or interviews or to obtain education from experts. Telephone and cellular phone costs related to new business start-up. Office supplies and some business tools (briefcase, iPad, business cards, etc.). DOES NOT INCLUDE vehicles, furniture, computers and other depreciable assets. [IRC Sec 167(a)]

Exceptions:  Money spent qualifying to begin a certain type of business, general are not deductible. This includes getting a degree, obtaining a license to practice (doctors, real estate…), etc.

The IRS “default setting” for start-up expenses is to deem that the taxpayer made a decision to amortize the amounts over a 15 year period. [Reg Sec 1, 195-1T(b)] To claim your seductions immediately, do the following:

1.Use IRS Form 4562 (“Depreciation and Amortization”) to claim your start-up expenses

2. Attach an “election statement” to your tax return, stating specifically that you wish to claim all (or the first $5,000) of your Start-Up Expenses in 2011, “the year in which your business became active”.

Start-Up Expenses are deductible in the year in which the business begins active operation, so if the business you are investigating never gets off the ground, you will not get any deductions. [IRC Sec. 165]

You have to show that you actually attempted to profit from your business. Just buying your ESS and sitting on your laurels does not qualify!

DISCLAIMER : I am in NO WAY a tax professional ~ just a Home Business professional who LOVES to file her taxes because of the massive deductions having a home based business allows us!  This information was shared with me – and thus I am passing it on to you. You are responsible for properly filing your taxes to deduct your start up expenses ~ but if you do it properly, you may see an extra $1400 less owed to the IRS for 2011!
Become a Promoter of the Body By Vi Challenge and you are eligible for these tax benefits. Click here to become a ViSalus Distributor.