Top Tax Saving Tips for 2011

If you run a home based business out of your Dacula home, you need to make sure that you are taking all the deductions you can on your business taxes and also make sure they are being filed properly. I have put together a list of the top five tax tips that can get you started for 2011. 

Before we get to that though, if you do not have your home based business set up with the Georgia Secretary of State, you need to get that taken care of NOW! Check out one of my most recent articles on what type of to have set up for you.

So, with that being said, here are five of my top tax saving tips for 2011:

1. Get your start up expenses calculated. If you decide to become your own boss in 2011, or did this in 2010, make sure that you keep track of your start up expenses in creating your business. Did you have to travel to another state to meet with a potential vendor? Keep track of it. How about mailing expenses for licenses, creation of you LLC or S Corp? These are tax write offs that were necessary to get your new business off the ground. Keep up with them. You can deduct up to $10,000!! In start up expenses in your first year.

2. Get ORGANIZED. If you do nothing else this year, get organized. There is nothing worse (I have been there) than having to piece together tax items for the previous year that I could have simply filed properly on a monthly basis. Keeping good and accurate records can save you a ton of money. Do not let this one slip through the cracks. Think about this: Each $100 in business expense receipts could be worth $50 when it comes time to file taxes depending on your tax bracket.

3. Got kids or a wife/husband? Bring them on board as part of your team. Wages are a business expense. What you can do is simply write up a job description, cut them a check every pay period and fill out a W-2. Any child under the age of 18 can earn up to $5,700 tax free. Of course they have to do some work for you but this is a good tax savings tip.

4. Pay yourself. We often forget to take care of the most important part of your business. YOU. Yes, your clients and customers are right at the top of the list, but if you are not there then there is no business. Set up a IRA or another retirement program and put pre-tax money away.

5. Track your mileage: If you are not doing this one, SHAME on YOU. Car expenses are a allowable expense. There are two ways to track this.

• Standard Mileage Method: 2011 mileage rates are $.51 per mile. This is up from $.50 per mile in 2010.
• Actual Expense: Keep track and keep up with all your actual business related auto expenses.

Compare what was the most benefit to you at the end of the year and use that method to calculate which deduction works best.

OK, so here is the disclaimer: This is not meant to be real tax advice as I am no account, but in my business I keep track of everything and then take it to my tax professional to figure out what I owe or receive back on a yearly basis.

Hope this helps some of you and if there are other ways you know to save I would like to hear your comments.