Home Based Business vs a Second Job

Jane Bryant Quinn, celebrated financial best selling author and syndicated columnist, related this personal story in a recent issue of Woman's Day magazine: "When I was a young working wife and mother, every dime I earned went toward my expenses - the baby sitter, business clothes, transportation, taxes and lunches, not to mention the cooked chicken I purchased on my way home because I didn't have time to cook my own. My work efforts added nothing to our joint checking account."

When you get a second job or mutually decide that the non-working spouse needs to go get a job, a number of dynamics take place. A family income of less than $39,000 falls into the 15 percent tax rate. However, any additional income would be taxed at the much higher 28 percent federal tax rate. Throw in individual state and social security taxes and, right off the top, 40 percent of your wages are eaten up by the tax machine.

Let's discuss some other expenses that are incurred when another income is added: car expenses including gas, oil changes, tune-ups, and tires, child care at an average of $85.00 per week per child, lunches at work, business clothes or uniforms and upkeep, convenience foods, and more. Think about your own personal situation. What additional expenses do you foresee should you get a second job?

This is where the true beauty of a home-based business comes in. In the above example, none of the job-related expenses are tax deductible - you will pay taxes on every dollar earned. However, if you instead choose to start your own home-based business, ALL of your business-related expenses become at least partially tax deductible! You are able to redirect your income to create, in essence, a home-based business that is also a tremendous tax shelter for your earnings.
This is why the home-based business is being called by many experts "the last great American tax shelter." Similar to a qualified IRA, 401K plan, or Keough, monies directed into those accounts are also tax deductible.

What can that really mean for you? Well, let's use the following Sample Tax Planner seen here to explain.



This is not a trick. Each example starts with the same income amount, but in the lower example, even though more money was spent/invested out of pocket, there are earnings of nearly $3,000 - and you haven't sold a thing yet!

That's why so many people are going into the home to start their own business. A home-based business allows you to maximize your earnings with the blessings of the IRS. Whether you choose to believe it or not, the IRS wants you to be rich! For one great economical reason - money. The more money you can save on your taxes with legitimate tax deductions, the more money you'll have to grow your business even bigger. And the bigger you grow your business means more savings to you, but it also equates to more tax dollars for the IRS! You and the IRS create a win-win situation for everybody.

Now get to it! Find the home business that is right for you here:
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