As an Accountant and Home Business Owner, I can’t stress how important it is to keep good records of your Home Business Income and Expenses. Keeping good accounting records will help make it easier for you and your tax accountant come tax time. It will also be easier to come up with the proof of your expenses incase you get audited.

During tax time, I see many clients who have home businesses like yours. One of the main problems is that many of them do not keep good accounting records. They just stuff their receipts and invoices in a shoe box and forget about them until tax time.

The reason why they don’t keep good accounting records is because they don’t have the proper accounting software and a good filing system. Having both is very essential to keeping your accounting records organized.

Today, I am going to recommend an affordable and easy to use accounting program that will help you to keep your business transactions organized. That software is called Quickbooks.

With QuickBooks, you can keep records of your Income and Expenses, Keep your Bank and credit card Accounts Reconciled, and keep track of how profitable your business is doing. It is very important to know how profitable your business is doing so that you can see where you stand. This makes it easier to make business decisions that will improve your financial position and lower your taxes.

Quickbooks comes in several different versions. I recommend one of the following Quickbooks programs for anyone in the home-based business industry.

Quickbooks Pro-PC Version

Quickbooks Pro-Mac Version

Quickbooks Pro-Online Version

Today I would like to talk about something that is overlooked in the home based business industry. The Tax Benefits of Owning a Home Based Business.

If you are an employee and reading this post, you probably understand that you don’t have that many deductions other than Home Mortgage interest, Real Estate Taxes (That is if you own a home) charitable contributions and employee expenses (reduced by 2% of your Income ). And those Schedule A deductions are phased out as your W2 income increases over a certain amount.

Owning a Home Based Business has many Tax Benefits. You are able to deduct your cell phone, internet, office supplies, mileage, and a portion of your home that you use exclusively for business. Just to name a few. You are already paying for some of those expenses (ex Cell Phone and Internet), but are not able to deduct them unless you own a home Business.People who own a home business typically pay a smaller percentage in taxes than those who don’t own a home business.

If you don’t own a home business yet, I encourage you to look into starting one as soon as possible so that you can start saving money in taxes. Some of you might be thinking that you can’t afford to start a home business because it is too expensive. Not always. There is a business that I recommend that you can start for under $100. You don’t need to drop your life savings or take out a huge loan to start this kind of business.

The Business that I recommend is Network Marketing. I recommend this business for several reasons. For one, you can earn an income on the efforts of your team. It is like owning  your own business with employees working for you. But instead of having employees work for you, you are helping the people you really care about obtain financial freedom.

As you build up your team in your network marketing business, you are able to take time off from your business and still make money since the income is residual. You can make money off the efforts of the people you brought in a year or two ago and they can do the same for themselves as well. By the way, you are not required to quit your job when you get started in a Network Marketing Business.

You can’t do this with most businesses. As a tax accountant, I make money for the hours that I put in and bill to the client. If I don’t work, I cant bill the client and therefore don’t make any money. This is the case whether I have my own practice or if I work as an employee for an accounting firm.

If you are a realtor you only make income when you sell a home and that is it until you sell another home. You don’t get paid for a home that you sold one year ago.

So if you want to take advantage of the Tax Benefits and the Time Leverage and Freedom that Network Marketing provides you, I recommend that you get started with a Network Marketing Company today or remain being a slave to the IRS.

I ran the Disneyland 1/2 Marathon Today in Anaheim California. While I was running I saw a sign on a local business that said “You Can Get All A’s And Still Flunk Life.” So I decided to take a picture with my Iphone and Write a blog post about my thoughts on this sign.

While I was thinking more about it, I was thinking about our school systems and how they educate us to get good grades so that you can go to a good college to get a high paying secure job. However, they don’t educate us on the concept of Money and how to have a successful career or business.

Of course some people go to school, get straight A’s in advanced courses like Calculus and Physics, but can’t balance a checkbook or have success in their career or in business later in their life. That is why many people are struggling with their finances. The average credit card debt is around $10,000. Many people see their home as an investment when it is actually a liability. Only a small percentage of people will have enough money to retire at age 65.

We could blame our school systems for this or take upon it ourselves to learn How to Manage money and become successful business owners. A great book that you can start with is Robert Kiyosaki’s Rich Dad Poor Dad.

In Rich Dad Poor Dad, Robert Kiyosaki had two fathers. A Rich One and a Poor One. The poor one was highly educated and intelligent. He had a Ph.D. and completed four years of undergraduate work in less than two years. The Rich father never completed the 8th grade.

One Believed in a company and government taking care you you and your needs. The other believed in total self reliance. One Dad Struggled to save a few dollars. The other simply created investments.

Throughout the book, Kiysaki will teach you the following:

-Why You Shouldn’t Work for Money, but have money work for you

-Why Financial Literacy should be taught and why you should learn it

-Why the Rich Pay Less in Taxes

-Why You should not work for money, but work to learn

You can get Rich Dad Poor Dad at your local Bookstore or at Amazon.com. It will be one of the best investments you will make for your financial education that will help you to have success in life.

To Your Success,

10 Reasons a Homebased Business May Beat Having a Job

My Business Partner, Ray Higdon Recently Did a Blog Post about “10 reasons why a Homebased Business May Beat Having a Job.” I liked the post so much that I have decided to re post it to my blog.

A friend and associate of mine, Patrick Snow, wrote a book called “Creating Your Own Destiny”. It is a great book that I highly recommend. In the book, Patrick made a list that he called “The Top 10 Reasons Why Your Job Sucks”. I wanted to take time to go through that list and then talk about how a homebased business may beat having a job.

Should Everyone Have a Homebased Business?

I thought I should answer that question. As much as I would like to say yes to that answer, the reality is, having a homebased business is NOT for everyone. If I could sum up one trait that is critical for someone to have success with a homebased business, it would be the desire of something more. That could mean more time freedom, money, adventure, fun, but more. There are lots of people that have fallen into the mass mediocrity of not wanting more and simply accept that their life is what they are going to get. To successfully work from home, Belief in yourself is absolutely critical. That is a BIG difference between working a job where so long as you can do what you are told, you can have some level of success. So, without further adieu, on to the list!

10. Not Enough Vacation Time

Do you really think your life is meant to be structured to only have one to two vacation weeks a year? Have you ever had to miss an important event due to “not having enough vacation time”?

9. No Tax Deductions As An Employee

When you work for someone else, you get virtually no tax benefits. In a book called “Lower Your Taxes” by Sandy Botkin, a former attorney and trainer for the IRS, he makes some powerful statements. In the first sentence and first chapter of the book he suggests you own a homebased business to enjoy the best tax benefits this country has to offer.

8. Unpaid Overtime And Working on Weekends

This is especially true in this economy. Guess what? When the unemployment rate is as high as it is, bosses and owners know that they can expect more out of you without paying you for it. They know there are plenty of people out there that would LOVE to have your job so the majority of bosses out there are asking employees to work longer and harder hours for the same or less pay.

7. Business Travel Away From Your Family

I have never had a job that didn’t ask me to do some traveling. However, I have never had a job consider my significant other and kids. However, compare that with my homebased business that I have won 6 vacations from in the last year, and, every single vacation, they paid for my significant other.

6. Your Daily Commute

You know what the best thing about an alarm clock is? Not having one. I remember getting up, getting ready and jumping in my monkey suit to drive to someone else’s building to work for someone else’s dream, now, my commute is from my bedroom to my kitchen where I usually have my laptop.

5. No Respect and No Job Security

Security is an interesting thing. Some believe that having a homebased business is too risky. By the age of 25 I had worked my way up corporate America as a project manager and then a database administrator. I saw people getting laid off and losing their job, to me, putting my future 100% in the hands of someone else was too risky. I have never had an actual terrible boss but I do remember defining moments in my corporate career where it was made apparent to me that my opinion really did not matter at all. Most people simply want more respect in life, that is something you don’t typically find working for someone else.

4. Too Little Pay and No Ownership

Most people focus on pay. That is not always the best thing to look at but in this economy, people are getting paid less and less to do what they used to do and, like point 8, they are getting asked to do more than ever. The BIGGER point is no ownership. Why would someone work their whole life on something they will never own. When you work a homebased business, not only are you paid in a more tax friendly way, you also have been building an asset that you own. You never see someone work their way up to a vice president level and then sell their position to their brother…that’s because they don’t own anything to sell.

3. Worrying About Being Laid Off

Here’s the reality, 20 of America’s largest corporations have shut down in the last 18 months. I recall one of the first to go was Bear-Stearns. Bear-Stearns was the 4th largest bank in the world, had survived 2 World Wars and the Depression and in the blink of an eye, one Monday Morning, 14,000 unsuspecting employees lost their jobs. Do you know who also lost their job that day? The Employee of the month. It is not always just the crappy employees that lose their jobs.

2. You work With a Bunch of Stiffs

This one doesn’t really apply to me as I have always worked with people that were fun to work with, however, I know a lot of people can resonate with this. However, owning a homebased business means having the power to pick and choose who you work with. In fact, just this morning I told someone that I didn’t think we could work together. Some confuse working a homebased business with trying to work with anybody and everybody and I simply disagree.

1. Your Boss is an “Idiot”

When I worked for other people, I certainly had my share of interesting bosses. One boss I thanked profusely for learning so much from them, I didn’t include the fact that they taught me about everything NOT to do, just simply thanked them for teaching me so much. Here is a quote from Plato that I think sums this up:

“One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.” – Plato

I think this pertains to your business life as well. Refusing to own your own business can doom you to be managed by those that are inferior.

If you enjoy this post, please quickly do me a favor and share with others and comment below.

To Your Abundance!

I was listening to the MLSP Wake-up Call the other day. Tracy Walker, a top leader in MLSP was discussing the concept of residual income and comparing it to bank interest. She also threw out some statistics that the average household makes $50,000/year and works 2 and ½ jobs. The average household credit card debt is $10,000.

75 and Working at Wal Mart?

She then went on to talk about her visit to her local Wall Mart where she saw an elderly woman who was between 75-80, sweeping the floor and checking receipts of customers. The Elderly woman was probably working at Wall Mart since she could not afford to retire. I don’t think she was planning to work there 30 to 40 years ago. But things have changed since then.

Jobs Are No Longer Secure

No longer do people work at the same place for 40 years and get a pension and a gold watch when they retire. Most people usually don’t spend more than 2 to 5 years at the same company. They either work there for a couple of years and move on to another company for a promotion or are replaced by someone who is making less money.

Residual Income Vs Bank Interest

Tracy then went on to talk about the concept of residual income and compared it to bank interest. In Network Marketing, you earn a residual income by investing money into a business and learning the necessary skills for enrolling people into your business.

Each month you will pay a monthly fee called an autoship. Sometimes the autoship will be around $100 to $250 per month. I know a lot of people grumble about paying a monthly autoship. But if they learn the skills necessary to retail and recruit people into their business and take action, they can actually break even and make a profit in a matter of weeks or months.

The Power of Residual Income

Here is where I compare residual income and bank interest. Lets say you are in company XYZ paying $250/month on autoship and making $100 in profit (You make enough money to pay for your autoship plus $100 more) every month for 12 months. You are actually making an annual profit of $1,200 your first year in business investing $3,000 over the course of 12 months. That is a 40% return on your investment.

If you wanted to make the same amount of money by sticking your money in 5% savings account, you would have to keep a balance of $24,000 in your savings account all year long. So what do you think is easier sticking $24,000 in a bank that you probably don’t have or getting into Network Marketing, learning the skills and making $100 a month? Obviously it is easier to invest $250 a month, learn the skills and make $100 a month instead of sticking $24,000 in a bank for a whole year to earn the same amount.

The Second Year

Let’s assume that the power of duplication doubles your profit a month to $200 in year two. That is $2,400 in profit which is an 80% return on your investment. Your still only paying $250 a month. To earn that in a bank account with a 5% interest rate will require you to keep $48,000 in your bank account all year long. Many of you probably don’t have that kind of money to stick in a bank.

So What’s the Point

What I am trying to do is educate people whether or not you are a network marketer to understand the power of the residual income in network marketing. Notice that I did not talk about making $5,000 to $10,000 a month. Many people think that they are failing if they don’t make that kind of money. But that is not true. As long as you are making a profit, you are doing better than most people.

Making $1,200 in profit a year off a $3,000 investment is pretty darn good. That beats putting $24,000 in a bank account earning 5% interest. Today you probably have to put $120,000 in a bank account to make $2,400 since most of them only pay a 1% interest rate.

If that 75 Year old Lady would have learned those skills 30 to 40 years ago, she would be sitting pretty spending her golden years on the beaches of the world instead of sweeping floors at a Wal-Mart. JUST THINK ABOUT THAT!

Don’t End Up Like That Poor Old Lady Working at Walmart! Learn How to Make a Residual Income in Network Marketing Today!