Does your tax adviser know how to maximize Home-Office Deductions?
If you are a small business owner and use your part of your home for business use, you may deduct home office expenses when you file your tax return. The question you may have is probably: How do I calculate it? What are the method(s) allowed by the IRS? Well, you need to know the IRS rules and have practical tax strategies.
According to the IRS publication: “You can use any reasonable method to determine the business percentage” of your home that you use for business. - IRS Pub. 587, Business Use of Your Home (2009), p. 6.
The publication then lists two commonly used reasonable methods:
1. Gross square footage method: Divide the area used for business by the total area of your home.
2. Number of rooms method: If the rooms in your home are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home.
But when you look at IRS Form 8829, it shows only the gross-square-footage method as an option. This conflicts with the IRS instructions and its publication.
As a matter of fact, there is a third method commonly known as the net-square-footage method. In your calculation, you probably should consider using this method to maximize your home office deductions.
Now what is net-square-footage method?
The net-square-footage method is used in cost accounting. With this method, you subtract from the gross square footage the footage consumed by: outside walls, hallways, bathrooms, stairways, foyers, water heaters, and the heating and cooling equipment.
The result is your net usable square feet. This method reduces the denominator in your calculations and increases the business percentage.
As promulgated by the Cost Accounting Standards Board and in commercial real estate, the net-square-footage method is commonly used in cost accounting standards.
Government grants and contracts are governed by cost accounting standards. In its cost disclosure statement to the government for its government grants, the University of Delaware uses assignable net square footage to allocate its operations and maintenance pool, which it describes as follows:
Assignable Net Square Footage. This represents the assignable net square footage of each room. The total assignable net square footage of a building is the sum of all assignable net square feet from all rooms in each particular building.
Taking the square footage of each room in total produces the same result as excluding the hallways, bathrooms, etc.
The University of New Hampshire also uses net square footage to allocate its facility service costs. The university defines net square footage as gross square footage minus common areas such as halls, bathrooms, stairways, and foyers.
Following is an example that we can see all the three methods and compare the results. Let’s say this home has four bedrooms, three bathrooms, a kitchen, a dining room, a living room, and a family room (eight rooms—you don’t include the bathrooms).
The outside dimensions of this home measure 2,200 square feet. When you exclude the common areas, you find 1,800 net square feet. Your office occupies a room that measures 250 square feet.
Here’s a comparison of the three methods:
|
Method |
Numerator |
Denominator |
Percentage |
|
Gross square footage |
250 |
2,200 |
11.36% |
|
Number of rooms |
1 |
8 |
12.5% |
|
Net square footage |
250 |
1,800 |
13.88% |
If you just used IRS Form 8829 and simply made the computations using the form for the above home, you would have a 11.36 percent deduction.
In this example, you end up with a 10 percent greater home-office deduction with the number-of-rooms method.
Yet the net-square-footage method would give you greater deductions than both other methods in this example. Compared with the gross method, the net-square-footage method produces a 22 percent increase in the home-office deduction.
The increase means you now deduct 22 percent more of your:
- mortgage interest;
- property taxes;
- utilities;
- insurance;
- rent (if you are renting your home);
- pest control;
- maintenance and repairs; and
- depreciation.
Conclusion:
If you claim a deduction for an office in your home and you would like to increase the size of that deduction, you need to seriously consider both the number-of-rooms and the net-square-footage methods.
The net-square-footage method will always be better than the gross-square-footage method.
The number-of-rooms method can beat the other methods in the right circumstances.
Make sure that you get theoptimum deduction. Do the little calculation that it takes to see the best result.
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MIKE ARROYO DENIES FIRST GENTLEMAN’S LINK TO SMARTMATIC AND TIM *2010 POLL AUTOMATION BID WINNERS*
(Update 2) Poll automation back on track
——————————————————————————–
By Aries Rufo, abs-cbnNEWS.com/Newsbreak | 07/03/2009 4:30 PM
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MANILA – Commission on Elections (Comelec) chair Jose Melo was all smiles after emerging from a 3-hour closed-door meeting with officials of the Barbados-based Smartmatic and Filipino firm Total Information Management (TIM) Friday afternoon.
How do you judge the way we look? Melo asked the reporters who staked out of the meeting.
Everything seems to be on track again. We are back to automation, said Melo, whose smiles were a far cry from his anxious look days ago.
Faced with threats of criminal and civil suits, TIM blinked and agreed to proceed with the election project with its foreign partner.
Asked how Smartmatic and TIM were able to settle their differences, Melo refused to elaborate, asking the media to respect the truce between the two partners.
However, he pointed out that TIM president Jose Mari Antuñez allowed the greater interest of the country to prevail.
He added: Whatever internal arrangement (they have), its between them.
Incorporation papers
The poll chief said TIM and Smartmatic are in the process of finalizing their joint venture incorporation papers, and are set to file these with the Securities and Exchange Commission (SEC) on Monday.
He said Comelec and the incorporated Smartmatic/TIM joint venture might sign the contract for the poll automation project by Friday next week.
The elections technology provider and TIM bid P7.2 billion to automate the polls.
Safeguards secured
TIM returned to the negotiating table with Smartmatic and the Comelec after it secured the necessary “safeguards” for the poll automation project.
TIM President Jose Mari Antuñez confirmed that they were able put in place some safeguards in its joint venture partnership that proved to be the turning point in its dispute with Smartmatic..
He refused to be specific, saying that he is bound by a confidentiality agreement until after the contract with the Comelec to provide electronic counting machines is signed.
Antuñez said he will tell the truth in the Senate hearing scheduled on Monday.
If they ask, I cannot lie, Antuñez said, when asked if he was willing to spill the beans on the real circumstances of its dispute with Smartmatic. The dispute almost railroaded the automation project.
Reports obtained by abs-cbnnews.com/Newsbreak showed that TIM sought to back out from the project after sensing that powerful people were trying to dip their fingers in the project.
Smartmatic and TIM won the right to provide electronic voting machines for the countrys first nationwide automated polls in 2010.
In jeopardy
The automation project was put in jeopardy after TIM announced last Monday that it was withdrawing from its deal with Smartmatic. TIM had dragged in signing the incorporation documents to be registered with the Securities and Exchange Commission.
The incorporation of the joint venture is one prerequisite before the Comelec enters into a contract with Smartmatic and TIM.
The documents are required by the Comelec as proof of the joint ventures legal personality for the contract signing.
TIM, which would have a majority or 60 percent stake in the venture, had wanted more control in the financial and technical aspect of the automation project.
TIM officials had alleged that despite Smartmatics minority, or only 40 percent, stake in the venture, the foreign partner would have more control over the partnerships affairs.
Without the proper check and balance, the groundwork for a possible electronic fraud is laid out, TIM sources said.
Smartmatic had insisted that the core issue is money. Lawyers of Smartmatic told Makati Rep. Teodoro Locsin that TIMs Antuñez had demanded P500 million from Smartmatic.
TIM had denied the allegation.
But as far as the poll body is concerned, it was TIM that was the guilty party. It threatened to file criminal and civil charges against TIM for backing out of the landmark project.
More involved
If the corporate dispute between Smartmatic and TIM almost wrote finis to the Comelecs most ambitious project, it also had its silver linings.
During its meeting with Smartmatic and TIM, the Comelec en banc reasserted its authority to be on top of the automation project, diminishing the possibility of Smartmatic running the entire show in the implementation of the automation.
We will have control over the entire operation. We will have our project management team, and this will be the one to give direction and orders, Melo said.
Smartmatic has been hounded by controversies in election projects it has implemented elsewhere. Its automation project in the Philippines is its biggest contract so far.
Duration : 0:0:28
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Plumbing Internet Marketing – Miami Plumbing Contractors Assocation Presentation
http://www.joshnelsonimc.com
This is a recording of Josh Nelson – Internet Marketing Consultant’s – presentation to the Miami Plumbing Contractors Assocation. In it discusses how Plumbing Contractors can increase their sales & revenue by more effectivly marketing online via Search Engine Marketing (SEO, PPC, Search Engine Optomization).
Duration : 0:12:17
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Which is the BEST online business opportunity?
I am talking about work at home, MLM, referral programs and the like.
The best network marketing company for you should be one that has characteristics that are necessary for YOUR SUCCESS, not the company’s success but YOUR SUCCESS. The best network marketing company must have at least 5 critical success factors in place in order to be a “good” company to consider joining.
Here are the five critical success factors that must be in place before you join any Network Marketing Company.
1.Does the company management have personal experience building their own networking organization? Have they done it with Integrity?
a.) Search Google for the owners of the company. Check these two websites: http://www.MLMwatchdog.com and http://www.imreportcard.com
b.) Do the owners have Integrity? Add the word ‘Scam’ to your search.
c.) Do the owners have a Corporate background or an in-the-field Network Marketing background?
d.) Read your "Policies & Procedures" and "Terms & Conditions"; both are part of your legal Contract
i.) Look for the word "Ongoing".
ii) Look for policies that strike you as "Unreasonable". Like "Termination, with or without cause"
iii.) Ask yourself "Does this contract protect me or the company?" "Is it clear which way it leans?"
v.) Rules of Thumb:
• The longer the contract, the greater the possibility that the policies important to you
are being hidden in "Legalese"!
2: Has the company passed the "early failure" Time Line? Are the company’s Products timed with the beginning of a massive trend of consumer demand?
a.) Beware of "ground floor opportunities" and start-up companies. 99% of companies don’t last two years.
b.) Avoid companies which have passed beyond their "momentum phase" and have become household names. (The realistic potential for big growth is gone)
3: Does the company have a Remarkable product at a reasonable price?
a. All MLM companies have a good product. But, there are others available that are just as good!
i.) It should be competitively priced.
b.) Warnings:
i.) If the product would not sell without the business opportunity attached, it is ILLEGAL.
ii.) If you can’t pay with a credit card and Must pay by cash or money order, it is ILLEGAL.
iii.) If distributors collect the money while the company stays at arm’s length, it is ILLEGAL.
iv.) If you MUST have a Retail Merchant’s account, the company is SCAMMING YOU.
v.) When you begin to justify your product to someone, You become a salesperson.
4: Does the Compensation Plan Pay Part-Timers?
a.) 95% of networkers are part-time people. The plan should ensure that people can make a decent income working a few hours per week.
b.) Beware of companies that advertise how many millionaires they have created. Make sure it’s not at the expense of those "at the bottom". Everyone should be able to benefit.
c.)Take the Comp Plan Test – Ask yourself this question:
"How many people do I need on my Team to earn a recurring income check of $500 per month?"
There are companies out there that require as many as 500 and as few as 20. If your up-line won’t or can’t answer this basic question, You should Run.
d.) If a company stresses "Recruit, Recruit, Recruit!", You should "Run, Run, Run!"
5: Does your Mentor offer a System for Success that will work for You?
a.) The team you join must have a system in place that will work for everyone who uses it.
b.) There must be complete resources available; books, videos and audios explaining the system.
c.) Personal development should have a big emphasis in the system. This is a relationship business, the more you know about yourself, the better you’ll relate to your clients and customers.
There are some really good Network Marketing Companies in the industry but unless you are experienced, finding them is like looking for a needle in a haystack. If you would like to see the company I partner with you can check out my personal site http://alanyoungsing.com for the link.
Best of luck in your search.
Alan Young Sing
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Cash Buyers To Assign To | REI BarCamp
http://www.realestateradiousa.com/2010/06/06/rei-barcamp/ | Learn how to do joint venture real estate investing deals at REI BarCamp.
If you are looking for the quickest and easiest way to make money in real estate, consider a joint venture partnership with a cash buyer.
We started out doing JV deals and here we are 20+ years later and it’s still one of the most used tools in the investor’s toolbox. No credit, no money, and really no prior experience is needed to to JV deals in real estate investing.
At REI Barcamp we will be sharing information freely and showing new and even experienced investors how to make a ton of money by utilizing the joint venture method of wholesaling.
REI BarCamp
assigningment of contract, wholesaling
wholesaling real estate
real estate investing
real estate investor
make money in real estate
flipping houses
flipping homes
Duration : 0:3:7
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what are the Email Etiquette and Rules For Internet marketing?
Hi all,I want to do Internet marketing through emails ..but dont know how to do this?
What are the rules and Etiquette to write the mail for Email Marketing.
To make sure you are using proper email etiquette, as well as staying on the good side of the law, you should read up on the "Can Spam" Act at the FTC web site; they have a Compliance Guide for Business at http://www.ftc.gov/bcp/edu/pubs/business/ecommerce/bus61.shtm which you should read thoroughly. Also check your ISP’s terms of service to make sure you are in compliance with their rules for email usage.
The CAN-SPAM Act: A Compliance Guide for Business
Do you use email in your business? The CAN-SPAM Act, a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them, and spells out tough penalties for violations.
Despite its name, the CAN-SPAM Act doesn’t apply just to bulk email. It covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites. The law makes no exception for business-to-business email. That means all email – for example, a message to former customers announcing a new product line – must comply with the law.
Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $16,000, so non-compliance can be costly. But following the law isn’t complicated. Here’s a rundown of CAN-SPAM’s main requirements:
Don’t use false or misleading header information. Your “From,” “To,” “Reply-To,” and routing information – including the originating domain name and email address – must be accurate and identify the person or business who initiated the message.
Don’t use deceptive subject lines. The subject line must accurately reflect the content of the message.
Identify the message as an ad. The law gives you a lot of leeway in how to do this, but you must disclose clearly and conspicuously that your message is an advertisement.
Tell recipients where you’re located. Your message must include your valid physical postal address.
This can be your current street address, a post office box you’ve registered with the U.S. Postal Service, or a private mailbox you’ve registered with a commercial mail receiving agency established under Postal Service regulations.
Tell recipients how to opt out of receiving future email from you. Your message must include a clear and conspicuous explanation of how the recipient can opt out of getting email from you in the future.
Craft the notice in a way that’s easy for an ordinary person to recognize, read, and understand. Creative use of type size, color, and location can improve clarity. Give a return email address or another easy Internet-based way to allow people to communicate their choice to you. You may create a menu to allow a recipient to opt out of certain types of messages, but you must include the option to stop all commercial messages from you. Make sure your spam filter doesn’t block these opt-out requests.
Honor opt-out requests promptly. Any opt-out mechanism you offer must be able to process opt-out requests for at least 30 days after you send your message. You must honor a recipient’s opt-out request within 10 business days. You can’t charge a fee, require the recipient to give you any personally identifying information beyond an email address, or make the recipient take any step other than sending a reply email or visiting a single page on an Internet website as a condition for honoring an opt-out request. Once people have told you they don’t want to receive more messages from you, you can’t sell or transfer their email addresses, even in the form of a mailing list. The only exception is that you may transfer the addresses to a company you’ve hired to help you comply with the CAN-SPAM Act.
Monitor what others are doing on your behalf. The law makes clear that even if you hire another company to handle your email marketing, you can’t contract away your legal responsibility to comply with the law. Both the company whose product is promoted in the message and the company that actually sends the message may be held legally responsible.
