Home Interior Design – Connecting Little Rock

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The home office deduction gets a bad wrap. There are so many rumors out about the home office deduction that you may want to avoid the whole subject. But if you have a home office and aren’t deducting it, you could be missing out on some very valuable tax savings. Let’s take a look at the truth behind the myths about the home office deduction.

Myth Number 1 – The home office deduction is a red flag for an audit.

Twenty years ago, this might have been true, simply because it was unusual. Now, the home business seems to be almost as popular as home ownership! Millions of individuals operate some kind of business activity out of their homes. Others telecommute, and deduct their home office expense as an itemized deduction. The home office deduction is no longer an automatic flag for an audit.

The key to avoiding an audit is reasonableness. The IRS uses computer analysis on all tax returns. Any deduction that is excessive on your income and the benchmarks for your industry may be questioned.

Bottom line: Deducting a portion of your home expenses as a cost to operate your home-based business is expected!

Myth Number 2 – If I take a home office deduction, I can deduct all the costs of my home.

You deduct a portion of your home expenses as a home office expense based on the square footage of your home office space. If you have a 2000 square foot home, and a 200 square foot office, you could deduct 10% of your home expenses.

Unless you operate a day care center, your home office space must be exclusively used for business. Your kitchen will not qualify as home office space simply because you use the table to complete paperwork. If you use the space for personal and business, it does not qualify.

The easiest way to keep track of this is to designate a room or rooms for home office purposes. If you don’t have a complete room to use as office space, use furniture to separate the personal part from the business space.

Of course, there is an exception to this rule. If your business is wholesale or retail and you do not have any other fixed location, you can include any space you use for storage of inventory or product samples as part of your home office. This space does not need to be used exclusively, but must be used regularly, and be suitable for storage.

Bottom line: Calculate the square footage you use exclusively for business and the square footage of your storage space for inventory to determine your home office deduction.

Myth Number 3 – I can only take the home office deduction if I work at home exclusively.

Old rule! Congress expanded the home office deduction to allow business owners without any other fixed business location to take a home office deduction regardless of the number of hours they spend at home. If you provide services to customers or clients at their location, you can still qualify for the home office deduction. You simply must use your home office for administrative and management duties.

Bottom line: You can deduct your home office as long as you don’t pay for other office space to run your business.

Myth Number 4 – The home office deduction will make me lose my tax exclusion on the sale of my home.

The rules have changed here, too. If you use 10% of your home for business purposes, you no longer have to recognize 10% of the gain on the sale that could have been excluded if you meet the requirements for the sale of your principal residence.

What you do need to do, however, is include any depreciation deduction you took in prior years as a taxable capital gain. You still benefit, because your capital gain rate is most likely lower than your ordinary income tax rate. You are able to take the original depreciation deduction at ordinary income tax rates, and bring it back into income when you sell your home at the lower capital gain rate. Your depreciation deduction can also reduce your self-employment taxes.

Bottom line: You can still save taxes overall by taking the home office depreciation deduction each year.

Operating your business from home is a very smart move financially for the new or small business owner. You can save yourself thousands of dollars in rent by operating at home rather than renting business space.

But the cost of housing your business is an expense, and should be treated that way. You would not hesitate to deduct rent expense for your business. Treat your home business expense the same way. The tax money you save can be used to grow your business, or even to fund your family vacation! Talk to your tax preparer if you have more questions, and get ready to take that home office deduction on your next tax return!

If you are working from home, you may or may not have an area of your home that you refer to as your office. It may be that you make your phone calls from the bedroom and complete your paperwork at the kitchen table and see customers or clients in the family room.

 

On the other hand you may have a separate room in your home which is furnished with a computer, printer, desk, comfortable office chair, phone, filing cabinets etc. from where you conduct all aspects of your business.

 

While from the point of view of maintaining an efficient office the latter option is probably preferable, many of us don’t have the luxury of an extra room that can be set aside for a home office and we end up working under circumstances much closer to those mentioned in paragraph one.

 

Regardless of how your “office” is set up at home, you may be able to deduct a portion of the operating expenses of your home and treat them as office expenses.

 

To qualify for these deductions you must use your home or portions thereof regularly and exclusively as your principal place of business for your home based business. Regular and exclusive use means that you can’t just point to a desk in the corner and call it your office.  It must be broken in by regular use. This does not mean you have to use it every day, but it must happen frequently enough to show that you are actively engaged in your home based business. 

 

If you think that the regular use of your office might be questioned, keep a log book (see Record Keeping article issued earlier in this series ) recording your home based business activities and business visitors for each day the office is used. You are not required to commandeer an entire room or a separate structure to meet the exclusive test.  A portion of a room is acceptable.

 

Whatever space you do set aside, however, must be used exclusively for your home-based business. You can set aside more than one area of your home for business.  For example, one room may be used as an office and another for meeting or entertaining clients. Your principal place of business is where: (1) you conduct the  most important activities for that home based business and (2) you spend the most time.

 

If you meet with clients or deliver goods or services to customers, your principal place of business could be where those meetings or deliveries take place. However, if your home based business has no fixed location, you may deduct expenses for a home office if you use your home to conduct substantial management activities and complete necessary paperwork.

 

You can have more than one principal place of business if  you have separate business activities. For instance, you may be employed and work in your employer’s place of business all day, then return home to run your own home based business on evenings and weekends.  Or you may own a business that operates in rented office space and also conduct a second home based business from your home.  Your home office expenses will be deductible, because your home is the principal place of operating your home based business.  It does not matter if your businesses are closely related or share the same clients, as long as different tasks are involved. Do not bring work home from your employer or another business that does not qualify for the home office deduction, or you could lose the deduction for your home based business activities.  You will fail the exclusive use test.

 

If your business is selling products, you may deduct expenses allocated to areas of your home regularly used for storing your inventory and product samples.  Your home must be the only location for the business of selling your products.  The exclusive use test does not apply to storage areas, but the space must be a specific, identifiable area. Suppose, for example, that you use a cupboard in your hall to store your inventory.  Even if you use the space to store linens as well, it will be deductible as part of your home office.

 

Deductible office expenses include a portion of the following expenses:

Rent,

real estate taxes,

mortgage interest,

utilities,

home insurance.

If clients or customers regularly visit your home, the costs of lawn care, landscaping, and driveway repairs may also be included.

Repairs to other parts of the house and family living expenses (such as food) are not deductible.

However, a pro rata share of repairs that benefit the entire home, such as roof repairs or painting the outside of the house, may be claimed.  The same is true for the business portion of the cost of installing and maintaining a home security system.

You may also include a deduction for depreciation on your home, but as this could well lead to a recapture tax upon the later sale of your home, you should obtain advice from your tax advisor before considering this.

 

The percentage of your home used for business is computed by dividing the square footage used for business by the total square footage of your home. Your home office deduction is figured by multiplying the total of your allowable household expenses by the percentage of the home being used for the home business. e.g. Total Square Footage of house is 1500 sq ft. Total Area used for business is 150 sq ft. making the percentage of the home being used for your home based business 10%. Thus 10% of total allowable household expenses can be used for home business deduction.

 

In most countries, the home business deduction cannot be used if your home based business already has a loss for the year. Neither can it be used to create a loss for the year. Usually however, any part of the deduction not used can be carried forward to future years. Verify with your Tax Advisor as these rules do differ widely between countries and also frequently change when tax authorities update legislation. If claiming the home business deduction you will need to record the following information:

Total Sq Footage of Home,

Sq Footage of Home Office Area(s),

Utility Costs,

Insurance,

Repairs & Maintenance,

Mortgage Interest,

Property Taxes,

Rent,

Although this sounds complex it is one of the most advantageous tax deductions available to home business owners and should not be overlooked. Should your home based business operate at a loss, you will probably be able to offset the loss against any other income that you have earned, thus reducing the amount of Income Taxes that you will be required to pay.

 

So now you should be able to see the very real advantage of operating a home based business.

Note: Taxation legislation differs between countries and each country may change their rules at any time. The information provided in these newsletters is accurate at time of publication. You should however seek specific information from your Tax Advisor or Taxation Department as it relates to your own situation each year that you are required to provide Income and Expense Statements.

 

Other topics in this series are as follows:

Number 1, Record Keeping,

Number 2, General Expenses,

Number 3, Purchase of Goods for Resale,

Number 5, Home Entertainment Costs,

Number 6, Motor Vehicle Expenses,

Number 7, Depreciation Costs,

Number 8, Business Meals,

Number 9, Salary Payments to Children,

Number 10, Travel Expenses,

Number 11, Demonstrators Samples & Promotional Tools,

Number 12, Gifts,

Number 13, Here Comes the Tax Man,

Number 14, Capital Items,

John Ritchie, A.I.B., A.I.C.B, F.I.C.B, email:brlynt@gmail.com

Copyright to this article belongs to John Ritchie. http://johnritchie.blogini.com. (Having Fun Making Money) Blog Site.

You may download and distribute this article freely and without restrictions. You must not, however, delete the resource box link.

If you make your living as an interior designer or decorator the current economy has got to be hurting your business. When the economy is slow, many people who might otherwise hire an interior designer or decorator are forced to move such a ‘non-essential’ service to the bottom of their priority list. If you haven’t felt the pinch yet, brace yourself as your business could take a drastic nose-dive during an economic recession. Nobody really needs interior design services, especially in have-not times.

There’s also the fact that so many of your days are spent on the business-side of design; negotiating with contractors, waiting for deliveries to arrive, billing, gathering quotes, and so on. This is all time that doesn’t directly generate revenue for your interior design or decorating business, and when client billings are already meager, this can really hurt your financial situation.

Maybe you’re one of the many trained interior decorators who have ended up working in retail for a 100% commission. If the economy gets worse and you’re working purely on commission, where does that leave you? Even in good times, if you work for 100% commission you might as well be your own boss and have the freedom to market yourself to new clients rather than being tied to any one store.

When I decided to take the reigns of my life back and do something that would allow me to profit from my creativity, I considered a career in interior design. I struggled with that option countless times across a 20 year period when I was unsatisfied in my work. I researched, and even interviewed, many interior design schools in my “former life” but for some reason I never took the step to enroll. I decided with my BA, MBA and a couple decades of experience in business, being in a classroom for two to four years with kids 20 years my junior was not something I wanted to do.

Never mind tuition costs and the tremendous loss of income while you’re a student. Then who knows how many years of working experience as a designer or decorator would be needed after graduation to really start earning money. I wanted to unleash my creativity and love for decorating, but I definitely needed to start making money as soon as possible. So, I started my own home staging company.

As soon as my business was launched, the money was coming in. Within my second year as a home stager I was making up to $10,000 per month. Compare that to the median annual salary of $36,150 a year for an Interior Designer according to Salary.com this year. I’m very happy I trusted my instincts!

If you’re an interior designer or decorator and you aren’t making enough money, consider adding Home Staging to your service mix or switching to a more profitable career as a Home Stager altogether.

Here a few ways a home staging business can be more profitable than an interior design business:

• As a home stager you get the opportunity to work with different types of people than you would as an interior designer. Generally, only very high income individuals hire interior designers, which limits your target market. Home stagers work mostly with clients in the middle to upper income level which gives you a much larger percentage of the population to market to, and increases the number of projects available for you to work on.

• Home stagers enjoy a higher volume of projects than interior designers because each one is so short in nature. One interior design project might take months to complete (especially when you factor in the wait times to have upholstery done, or furniture delivered), but the average home staging project takes only a few hours or days. There’s no way I could have decorated hundreds of homes within a couple of years as a new interior designer, the way I did as a new home stager. With such quick projects, a home stager is able to complete (and get paid for) a significantly higher number of projects per year than an interior designer who often has client work on hold through no fault of their own.

• When the economy is slow, people eliminate the non-essentials. Interior design or decorating isn’t really high on the “essential items list” especially when choices need to be made about what to give up, and there’s no real deadline to redecorate or renovate a room. In uncertain times, interior design moves way down on the priority list, while home staging move up. No matter how slow the economy is or how much the real estate market has declined, there will always be people who absolutely have to sell and move by a certain date. Divorce, job relocation, job loss, mounting debts, a death in the family or a birth often get people to put their house on the market even if it isn’t the best time to sell. When a homeowner is desperate to sell their house, a home stager will often be involved since the seller stands to make a handsome profit from their services. When people have less time, less money or less equity in their house, they need a home stager so they can get whatever they can out of the sale of their home! As a home stager, your creativity and talent for decorating will serve you well in slow economic times and slow real estate markets.

I especially love the amount of creative freedom I get as a home stager. Because my clients know I’m decorating their home to sell and not for them to live in, I am able to execute my creative vision without their interference or taking their taste into consideration. I can’t imagine wasting hours sitting with a client who can’t decide which color they want for their bathroom, or which fabric to pick for their drapes. My clients don’t care what I choose as long as their house will sell quicker because of it. Besides that, my home staging business is extremely profitable which every entrepreneur wants.

If your interior design business isn’t doing as well as you hoped, it’s not too late to make a change towards living a more creatively fulfilling career that is also more profitable. Do some research into the home staging field. It’s a career that is virtually “recession-proof”.

Looking for legitimate work from home business ideas? Well you have come to the right place. We at HomeBizScout.com have scoured the web in search of legitimate work from home business ideas.

Before I start to list the ideas I just want to make sure you understand that these are not get rich quick ideas nor are they become a millionaire overnight! Oh and let’s not forget my favorite start making $5000 a week! Nope these are legitimate business ideas and they all take work, time and yes even some money to get started. Being a business owner is HARD WORK!

If you are not a hard worker or more importantly a self starter then please don’t waste your time or money trying to start a legitimate work from home business. It’s not going to work for you. I am sorry but I just prefer to keep it honest! Being a business owner is not for the faint of heart! You have to wear many hats, work extremely long hours on little to no sleep, and you have to make extreme sacrifices!

 Now that I have gotten my short sermon out of the way, without further ado let me introduce you to 10 legitimate work from home business ideas…

Business Coaching
Catering/Personal Chef
Childcare/Nanny Services
Cleaning Services 
Computer Repair
Customer Service
Data Entry
Event Planning
Gift Basket Business/Gift Basket Maker
Virtual Assistant

If you would like more information on any of the home business ideas listed above or you would like to get more ideas make sure to visit HomeBizScout.com – The Insider’s Guide To Working From Home.

How to pick the right home based business for you!

When it comes to  home based business information you need to search pretty deep to find truthful and unbiased information. Always do your research, call and ask questions. What are your goals for this home based business in the next year and then in five years.

Are you looking for a cash home based business alternative?

If you are like me you are strictly in this for the cash flow. I used to do all the odd and end home based internet business programs. Affiliates, click bank, ad sense, they just don’t work like they say they will as a home business…

How I received over 10,500.00 in one week in Cash!

By now you must be a little confused yet wondering what my hidden secret to cash flow is? It is no secret. To learn more about my cash flow increasing home based business online alternative simply click here..

What do they tell you? Is it all hype and dribble drabble? Then you should be trusting your gut and running far, far away!

If you are some one that needs to be chased down and arm twisted to do anything then any home based business will not really work for you. You need the lazy man’s way of getting cash and all cash delivered directly to your front door….Sure does Sound like a sweet plan for an awesome life, does it not?

Beware There Are Many Phonies Online….

Don’t accept hype and pumped up claims with out some form of proof..

Beware many people and home based businesses on the net are using graphics programs to manipulate pay pal and other credit card payment processors to make it look like they made millions when it was pennies..

There are several things to consider when thinking about starting a home based business. The first being whether or not you are motivated enough to work without being told what to do or how to do it. A successful home based business entrepreneur is a self starter who enjoys personal success. Small business owners work well independently, thrive on challenges, and do not fear learning new things or bringing their unique ideas to others.

The good news for all of the clean-tech entrepreneurs is the added boost that the U.S. Government is placing in the ACESA stimulus legislation. The American Clean Energy and Security Act of 2009 has a few main parts or provisions; all of which lead many people who wish to start a small business straight in the direction of solar energy.

1. A clean energy section that promotes renewable sources of energy; such as residential and commercial solar energy on a very large scale.

2. An energy efficiency section that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation, and industry.

3. A global warming provision that places restrictions on the carbon equivalent emissions and other environmentally damaging pollutants.

4. A transitional program that protects U.S. job seekers, consumers, businesses in these tough economical times with training, career adjustment, and transitioning support.

5. A very large program that promotes green jobs during the transition to a clean solar energy economy.

Having a home based solar energy business is work. Even with large incentives and the backing of the government, industry, and most citizens, you must still do the work in order to enjoy success. If you are the type who is self directed and motivated then the next consideration is what will you do? Consider what you are passionate about. What gets you excited enough to want to share it with others?

Use this information to create an ideal home based solar energy business.

Do some Internet searches or talk to other small business owners related to home based work that they made into a successful business and see if you might want to do the same. A clean-energy entrepreneur can create a operational statement for the way and type of solar energy business the wish to operate. This will be the bases for the services they can offer. Ask yourself the question “what will set my home based solar energy business apart from others?” Then write out a small business plan.

If you know that starting a home based solar energy business is right for you, then your next step is educating yourself about the requirements that govern home based businesses locally within your state, county and also with the US government and IRS. After completing due diligence, as a person should for any type of business consideration, decide if they possess the financial capital to get the business started. Fortunately, many new solar energy opportunities really do not take any investment (other than marketing costs) to get started. A person can just plug into a larger system. The landscape is change in a great way towards renewable, solar energy. This provides unparalleled opportunity for businesses as it relates to the U.S. Government’s interest in fast-tracking our transition to a clean energy environment.

United States Green Jobs: Worker Transition to Solar Energy Industry

The latest draft legislation related to an economic stimulus, a plan to address climate change, and a strategy to move into a renewable energy environment includes several provisions to promote solar energy jobs. One section authorizes the Secretary of Education to award grants to universities and colleges to develop curriculum and training programs that prepare students for careers in renewable solar energy, energy efficiency, and other forms of climate change mitigation. Under another section, the Secretary of Labor is authorized to carry out such training programs.

There are good opportunities out there that do not require an upfront investment. Emerging technology in renewable energy is creating what are called green collar jobs. Solar energy is now a viable business opportunity for the home based business owner. The outlook for renewable energy in 2009-2010 is very bright.

In fact renewable energy is in the forefront of business opportunities right now. For those who are passionate about saving money, going green and creating a home based business, a solar energy business is a golden opportunity.

The solar energy market is a largely untapped sector of the business and renewable energy industry. Home based business owner’s need this type of information and the support the U.S. Government is showing to really kick start exciting new career options for many U.S. citizens.

It is the win-win business of 2009 because everyone benefits from a solar energy business.

Before you can have a successful home based business, you must first possess 3 “intangibles.” These are things that must come from WITHIN you.  

Intangible 1

First,you must have a strong WHY.

Why MUST you have a successful home business? What is driving you? What is it that you CAN’T have in your life anymore and/or what is it that you absolutely MUST HAVE now?
For me, I couldn’t stand working 12+ hours a day anymore and missing the experience of my children growing up. I also absolutely HAD TO HAVE the freedom of being able to control my life and finances through a little box (laptop computer) that I could carry with me anywhere in the world and not be tied to anyone’s time pressures or demands but my own. That was my carrot and my stick. I felt a great pain deep in my gut of missing out on my children’s lives and the incredible freedom that succeeding in a home based business would provide for me. I found my why. You MUST find yours.

Intangible 2

You must BELIEVE that it is possible.

If you don’t believe that it’s POSSIBLE for you to have a successful home based business or make your living from home, you won’t. It’s that simple.
For me, figuring out that it was possible was just a matter of realizing that many other people were ALREADY making great money working from home. If they could do it, I could too. It would just be a matter of figuring out what those people were doing and then adapting it to my situation.

There is no shortage of undeniable PROOF that people (millions of them) are making money working from home. Just get online and do some research and you’ll find countless testimonials and stories of REAL PEOPLE making real money on the Internet. Or head to your local bookstore and you’ll find the same documented evidence of this fact. Truth is, it’s getting easier and easier to make money with your own home based business.

I’ve always said that “affiliate marketing” (a simple way to make money from home) is the job of the future. In the old days, you had to go to a potential employer, apply for the position and hope for the best. Now you can simply go to any company you want, fill out their affiliate application and start work immediately. Affiliates are the new working class. In fact, making money with affiliate programs or making your living on the Internet is WAY MORE than possible. It is pretty much (or will be soon enough) unavoidable now. Affiliate marketing is the “job” of the future that’s already here TODAY.

Intangible 3

You must be willing to MAKE THE LEAP.

Ready, FIRE, then aim… This is the operating philosophy you MUST adopt to succeed with a home based business.
That’s backwards for most people who like to aim before they fire. The fact is that home based business success is a moving target… The only thing constant about it is change. You need to stop analyzing the game and simply jump into it. You can’t learn from the outside… You have to be *IN THE RING* to truly understand and profit from it. In fact, this is a business where you can truly be earning WHILE you’re still learning…

The lesson here is that you will never really be READY to start a home based business. You simply have to start one. It’s like having children… You’re never really ready, but when it happens you adapt and grow and therefore you succeed. This is what I call: “Making the Leap”!

The good news is that the cost of failure with having your own home based business is very small. In the “brick and mortar” world you need to evaluate things very carefully before you decide to open up a business. It’s almost always necessary to invest thousands of dollars to get an offline business off the ground. However, on the Internet you can often start a successful business for less than $100. The Plug-In Profit Site is a great example of this where you can get your own money-making site setup free within 24 hours:
http://www.PlugInProfitSite.com/main-28425

You simply need get IN THE GAME… Each moment that you stay “out there,” you’re wasting valuable time that you could be learning and skills necessary to build a successful home based business. In fact, if you’re not in the game yet, you’re ALREADY behind the times… Make the leap to starting and building a successful home business TODAY!

About Stone Evans, The Home Biz Guy:
“I Was A Washed Up Restaurant Worker Desperately Searching For
A Way To Save My Family When I Discovered The Internet And
Affiliate Marketing… 24 Months Later I Finally Cracked The
Code And Started Earning Over $10,000.00 Per Month… Now The
Same System That Saved Me Is Available To You!” Make Money Now!
http://www.PlugInProfitSite.com/main-28425

In order for your website to get a good search engine ranking you need to have people linking to you. There are several ways to do this that I will explain and this will help your home based internet business thrive with hits and sales

1. One of the best ways to raise your ranking by the search engines is by offering content that people need and they will naturally link to your site because of the information you have provided. Most people are looking for information, tips, and tricks that they can use. For example this article, if you did not already know, this article will give you ideas on how to increase your rankings and get more traffic to your home based internet business site.

2. Next big tip is to write articles about your topic of interest. People like new information so do search engines. Include a link to your site in every article you write. Not only is this an inbound link it will help raise your ranking. There are several places to submit articles to on the web. Do a google search and you will find several. Some of the most popular include this site. plus Hello article and Article Dashboard. Make sure you include a link to your site at the bottom of each article you submit. Then for the anchor words, use your keywords that you are trying to get a good ranking for. Example would be: “Profitable Home Based Internet Business”.

3. Exchange links with other site owners or sign up at a reputable link exchange company – try and find sites with relevant information to your site, for example “profitable home based internet business”. Whatever you do, DO NOT join a link farm. The search engines will penalize you for this.

4. Research your competitors links. Find sites like yours and see what sites link to them . For example if your keyword is “profitable home based internet business” you might want to go to google.com and type in that keyword. When the results come up check out which sites are like yours. You can go to google research and find what links to the url you are interested in.

5. Internal Linking strategy will also help you. Search engines like internal linking. For example if you have a five page website pages, you should have links to each page. In addition, if you have more than one website you should definitely link to them on each page.