home business industry

Is Your Home Business A Hobby Or A Real Business?

2009-06-07T21:11:00.000-07:00

I attended a very exclusive wealth conference in San Diego last week and one of the keynote speakers did a segment on treating your home business like a real business NOT like a hobby.

Sounds odd right? Who on earth starts a business and doesn't treat it like a real business? You'd be surprised...

To my surprise and to the surprise of just about every other entrepreneur at the conference, the IRS is not too thrilled with this approach either. As a matter of fact, they have recently taken a stance on this issue due to the astronomical number of home business start ups in the United States as of late.

In case you didn't know, home based businesses now represent 52% of small businesses in the United States according to Small Business Administration (SBA).

Entrepreneur Magazine recently reported that the home business industry is a $427 BILLION per year industry - more that the pharmaceutical industry, food industry and consumer goods industry combined!

So here's what you need to know:

IRS Definition Of A Hobby

It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity in which you DO NOT expect to make a profit.

It amazes me everyday in this industry how many people have the hobby mentality and take the "I'll give this a try and see if it works" approach. You know what I'm talking about. We've all been there at one point or another.

Well, I have some disturbing news on taking that approach to running your home business. "If you do not carry on your business or investment activity to make a profit, you CANNOT use a loss from the activity to offset other income."

The crucial distinction between a hobby and a real business is whether you engage in the activity with what the IRS calls a profit motive.

I thought this was fascinating because the amount of people I see each and every day that want to begin their own businesses actually do not really have a profit motive. They think they do but they really don't and in most cases they take the every popular: "I'll give this a try and see if it works" approach.

Most home business owners do not realize that if their business is properly defined and properly structured (more on this in a moment) from day 1, ALL of their expenses are tax deductible against ALL household income. NOT just against the income from their home business.

You may want to read that again. Here is an example for illustrative purposes:

John and Susan Smith earn $80,000 per year between the both of them from their full time jobs. They start their own home business with $2000 and eventually invest another $5000 into their business over the course of the year to get it off the ground. They have now invested $7000 in their first year.

If they have properly structured their business from day 1 and have a profit motive from day 1 then they are entitled to a $7000 tax deduction for the current calendar year.

So instead of John and Susan paying taxes on $80,000 (their combined job income), they would only pay taxes on $73,000 ($80,000 combined job income - $7,000 in home business start up and expenses).

Not a bad deal, huh? Now, if John and Susan earned $20,000 in their home business that year then they would pay their normal taxes on $80,000 from their combined job income (since they do not show a loss). But, they would only be required to pay taxes on $13,000 of their home business income because they had $7,000 in expenses ($20,000 earnings - $7,000 start up / expenses = $13,000).

Do you see the powerful benefits of owning a properly designed and properly structured home business? Ok, so how do you know if your home business is structured properly and NOT viewed as a hobby?

We'll let's have you take a quick test. Have you ever said any of the following at any time when you began a business? And be honest...

1. "I'll give it a try and see what happens."

2. "I'm doing this with the idea of making a profit and if I can't make a profit doing this, then I'll find something else to do that will make me a profit."

3. "Let's see if we make any money at it first"

Notice the above words in italics. If you find yourself using any of these words in your business endeavors it may be time to rethink this whole being your own boss, entrepreneur thing. Not to mention, it is a hobby mentality and frankly, is a damaging mind set to be in.

So, do you have a profit motive? Let's see. Here's what justifies a profit motive?

First and foremost, you must never take the approach in questions 1 - 3 above at anytime or you are clearly not serious and will most likely spend more money than you ever earn. And, you must Incorporate your business otherwise you are viewed by the IRS as a sole proprietorship. A sole proprietorship is when you operate your own business without a formal legal entity such as a corporation (Inc.) or (LLC). This is very risky.

When you operate you business as a sole proprietorship there is absolutely NO legal separation between you and your business and you have personal liability for every business debt.

Guess how the IRS feels about this? Yep, hobby. Your chance of getting audited doubles as well. Yes, doubles.

Furthermore, we live in the most litigious society in the world. 4 out of 5 small business fail in their first 5 years. This is a national statistic.

Considering the great majority of new business owners use their own personal money to begin their enterprise, should their business fail, business creditors can now rightfully go after your personal assets.

Not good. So ask yourself 2 questions right now to determine whether or not your home business is a hobby or a real business...

1. Am I taking the "I'll give this a try and see if it works" approach?"

2. Is my business properly structured right now by being incorporated for legitimacy, protection and long term success?

The answers lie right there.

Andrew J. Cass is a Home Business Development Expert and Professional Marketing Consultant. He is in the top 1% of income earners in the Home Business industry. To learn insider secrets and powerful marketing strategies from the pros to help you explode your home business empire, sign up for Andrew's FREE cutting edge Ezine at: http://www.TheHomeBusinessInsider.com

This article is available for reprint or redistribution.

Start a Home Business and Make Your Business Opportunity Money Fly Through the Roof

2008-12-01T21:00:00.000-08:00

How would you like your bank account to take off? Well it can with the right determination and focus. You can when you start a home business and have the business opportunity money take off. Many people daily get involved with the internet and joining business opportunities. It has been the thing to do lately especially with times getting harder. Not only is it a great chance to make massive amounts of money, it is a complete learning curve to achieving success.

Internet home businesses have been evolving each and every day. It has many more benefits that running and owning a traditional store front business. You don't have to worry about inventory issues, employment, a mortgage, insurance and many other factors. You work for yourself when you want to work, no longer having to answer to a boss. The best part is being paid what you think you deserve, work harder and your income can grow quicker

So how do you start your business opportunity money making days? The first and most obvious aspect is finding a legitimate home business. With there being so many different opportunities on the web it's hard to find the perfect one. When searching, make sure you do a thorough search and view all aspects of the opportunity you want to join. If need be contact your representative or the company and ask all possible questions needed.

Depending on the business opportunity money making company you join you will need to take action for your business to grow. Set up a website and drive traffic to your site. To do so you must learn the proper techniques of Search Engine Optimization (SEO).

Free methods of SEO involve setting up your website with the proper keywords that help in search engines. You can also start blogging, getting involved with social bookmarking sites, submitting to website directories and many more options. Your main objective with you site is to get as many back links pointing back to your site. This can take longer than paid marketing but it can save you a lot of money when starting off.

Most popular paid form is Pay Per Click (PPC).PPC is bidding on keyword or keyword phrases so your ad can be viewed within Google searches when that keyword is searched. Anytime you search anything on Google you will see ads that run along the right side of Google which are known as PPC (Google AdWords on Google). There are other search engines that do follow the same rules.

So there are many things that you must consider when looking for your business opportunity money making ventures. But it is a wise decision to start make money on the internet with your home business. There are many helpful websites on the world that can go more into detail about SEO and you should definitely grow your knowledge to the online world. It is time for you to add to your bank account and create wealth.

-Matt Belock

Process Rebates Online - You CAN Work From Home

2008-08-21T18:55:00.001-07:00

Many people want to know how to process rebates online. This popular work at home was recently rated the #1 work at home opportunity for the year of 2007. It is very easy to see why rebate processing was presented with this high award. After all, who wouldn't want to work from home in their PJs? It's the American dream!

In this article I will show you how to process rebates online. It's actually not that difficult, but people make it out to seem so much harder than it really is. Don't make this harder than it is. Just do it, and you will be successful.

How to Process Rebates Online

First off you are going to need to learn how to process rebates online. Unfortunately, there are not any sites I have found that offer you the opportunity to learn rebate processing for free. There are all types of membership sites out there that offer this service. If you do pay a membership site, be sure to do a bit of research on the site before joining.

After You've Learned...

So now that you've learned how to process rebates online, you can begin processing rebates! Personally I recommend you setup a time of when you will be processing rebates. For example, 7am - 11am. Why? Because when you can actually work from home with no boss, many people are unable to stay on task and will just slack off, resulting in a very limited amount of money. A large majority of people blame the work at home opportunity they are apart of, when really is it them that are not allowing them to make money online.

Discover How You Can Process Rebates Online

Ready to learn more about rebate processor jobs? Discover how to make a full time living and start enjoying life by becoming a rebate processor.

Receive step-by-step instructions and take part in this exciting and profitable opportunity, just visit http://www.rebate-processing.com

Article Source: http://EzineArticles.com/?expert=Jack_Mitchell

Top Internet Home Based Business In Travel

2008-08-17T19:50:00.000-07:00

A top Internet home based business in travel is a very viable preposition indeed. This is because of several reasons and we will mention some of them in this article.

The first reason why getting involved in a top Internet home based business makes a lot of sense is the fact that the world travel industry is one of the very few world industries that is not in decline. In fact thanks mainly to the World Wide Web, which seems to have fueled lots of traveling for both business and pleasure, the travel industry has been growing steadily in recent times.

Not even 9/11 and the disastrous after effects that are still affecting us all, has managed to halt the travel industry's consistent growth. This is one of the main reasons why this industry has to be classified amongst the top Internet home based business opportunities anybody can get involved with today.

The advantages of going into a business based on an industry that is experiencing growth are obvious. Growth and ultimately success is much more likely for a top Internet home based business that is in a growth industry than it is for one which is not.

Also, there is no ignoring the fact that some of the most successful top Internet home based business affiliates are in a travel related industry. This is one industry that is a natural for an Internet business. The World Wide Web makes it very easy to market with photographs, videos and 3D images that can give one a pretty accurate feel of what a hotel suite or travel destination really feels like, long before one has actually arrived there.

It is really difficult to compete with a top Internet home based business that is related to the travel industry.

Learn more about the best home business opportunity from a blogger who rakes in thousands of dollars... and growing from their home business.

by: Christopher_Kyalo