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Did you know that you could be making money each year through your home? With the current trends, icommerce and the Internet it is becoming easier. It still takes some effort. but depending on your skills, it might be easier then you think. Many people have the skills already to network and run business but it isn’t difficult for you to catch up either. While it almost sounds too good to be true, it’s not! The government offers huge tax breaks to those who have home based businesses - regardless of how well they do.

How is this possible? The tax laws that allow large corporations to write off thousands of dollars in expenses are also available to those with home-based businesses. The only difference between most home based businesses and fortune 500 companies in the eyes of the IRS is their size! As a Home Business in fact, you can also deduct many home office and other expenses.

As an independent consultant, you can take advantage of many more tax deductions for business expenses than a regular employee can. The IRS taxes the net profits of businesses, rather than gross income, like it does for employees. Your profits, by definition, don't include the money you spend for office equipment, supplies, advertising, business-related travel, etc. Take care, though. This extra advantage can also be tricky, as the line between personal and business isn't always clear. Talk to your accountant whenever you have a question.

Let’s take a look at some of the seemingly “ordinary” things that can be legally deducted by a home based business owner. But before we get started, it is important to find a solution that works for you! Of course in any business, your intent is to make a profit as soon as practical.

Meals and Entertainment

When you discuss business with co-workers and friends at lunch or dinner, your meal is 50 percent tax deductible. For that matter, so are other expenses relating to entertainment focused on building relationships with prospects, retail customers, and business partners (downline or upline distributors). Theater and sporting event tickets are 50 percent tax deductible, too.

Travel

When you travel a fair distance from home you might be able to deduct much of your trip even if you spend time relaxing. There are rules that need to be followed but if a majority of the time is spent on business it should be fully deductible. If you spent one day traveling, on day in meeting or distributing information on your products and services, another day traveling back – you still might be able to get two day to relax in between.

Car and Fuel

Automobile mileage is deductible between your home-based business office and a meeting where business is discussed. That includes the meals mentioned above, an opportunity meeting, or even golf outings with friends who are prospects! Travel is deductible, whether it’s to an industrial center or an island resort, if the purpose is to hold an opportunity meeting, to discuss business with other travelers, or to attend a seminar. Travel is deductible for a wife or husband whose presence is helpful in closing the sale. You can also deduct wages paid to your children for help in the business, and if those children have no other sources of income, all wages under $4,000 per year are tax-free. It’s a great way to save for college with Uncle Sam’s help!