Become familiar with the tax system and how you can maximize your return. One way is by starting a home-based business. You can earn money and with the deductions you will have, such as a portion of your rent/mortgage and your utilities, you will be able to keep more of that money in your pocket. You can even write off your losses against other sources of income. The best thing to do is hire a tax professional to handle your taxes, someone who will be able to maximize the amount of money you can save. Remember, you have to spend money to make money. There are, for example, accountants that focus on preparing tax returns for actors and/or other entertainment industry professionals. An accountant that specializes in filing returns in your area of expertise may be your best choice.
Finally, there is an avenue that is available to explore, yet is something you may not be aware of, may not have considered, or simply may not believe is even possible. This are tax advantage investments, such as retirement plans, self-directed IRAs, and real estate. I know you may be thinking this is crazy, you hardly make enough money or you don’t know anything about investing, but if you take it one step at a time and do your homework, there are ways that you can actually have your money start working for you.
The key is to know your options, be organized, and conduct yourself in a professional manner. A very helpful resource to understand taxes better is the book Lower Your Taxes – Big Time! Wealth-Building, Tax Reduction Secrets from an IRS Insider by Sandy Botkin, CPA, Esq. You will find valuable tips and rules explained in a way that completely non technical people can understand. The chapter entitled “How to Shield Yourself from the IRS Weapon of Classifying a Business as a Hobby” is absolutely critical and will pay you back for the cost of the book many times over.
Whatever you do, do not leave your tax preparation until mere weeks before your return is due to be filed. This will cause you an un-necessary amount of stress and may cause trouble for you with the IRS if you do not have your documents in order. It may also cost you money you can’t afford to pay.
1 comment:
Thanks for the link to my blog!
I agree with this whole thing- but I especially agree with not leaving your tax preparation until the last minute. This almost guarantees that you are either, a) are so ill-prepared that you miss out on valuable deductions, or b) your taxes are prepared so quickly that you put up a red flag to the IRS and get audited. This is the one part of your business where you do not get to make the rules, so take care.
Keep up the great work, Abundance Bound!!!!
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