Tax Incentives

Yesterday, I talked about having a part-time business. Not only can you provide a substantial income with a business, but you can also significantly reduce your income taxes. Now, I am not a tax professional, but I have been using business expenses deductions on my personal income tax return for almost 20 years.

First of all, the business must be in your name. If it is a separate entity or company, these deductions would apply to the corporate tax return. Many purchases and services paid for can be a business expense deduction. This means you can reduce your taxable income before the tax tables are applied. As a person filing a return, you taxes are largely based on your income. Most of your expenses have to come out of your own pocket after you earn the money.

All of this is filed on a Schedule C - Profit or Loss From Business IRS form. Here are just some of the expenses you can deduct - advertising, car or truck expenses, depreciation, insurance, professional and legal services, office expense, supplies, rent or lease of equipment, licenses, utilities, business travel, business meals, other miscellaneous expenses, and even allowances for the use of your home as an office. All of these legitimate expenses (be sure to follow the IRS rules for proper application) can reduce your business taxable income and ultimately your personal taxable income. Best of all, you get to use these goods and services while operating your business.

Keep in mind that this is not an excuse to go out and buy all the neat gadgets out there, for you are still getting only a 15-35% deduction (based on your tax bracket) for every dollar you spend.
Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. This is also why you pay taxes, for the authorities are God's servants, who give their full time to governing. Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Romans 13:5-7 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com