Entrepreneur Resources: Small Business Blog

Tax season is upon us! Continue reading to get tips on how your home business can decrease your tax liability. This article was contributed by Barbara Weltman of JKLasser.com.

A home office can mean the end of stressful commutes and bad hair days. A home office also can deliver a bigger tax refund. Your home office deduction is in reach if you follow the rules and keep the proper records. While it used to be a big red flag; taking a home office is no longer like wearing the scarlet letter of a tax cheat. Relax and don’t be afraid to get the most tax savings from your home and business.

When you use part of your home for business, you may be able to deduct expenses for the “business use of your home.” If you meet the requirements of the tax law, you should be able to deduct a percentage of many of the costs of running your home, such as: utilities, rent, insurance, depreciation, mortgage interest, real estate taxes, and some casualty losses, repairs, and improvements (as they relate to the part of the house you use for business).

Requirement #1: Regular and Exclusive Use- You must regularly use part of your home exclusively for a trade or business.
– There are two exceptions to the exclusive use rule: You don’t have to meet the exclusive use test if you use part of your home to store inventory or product samples, or if you run a qualified day care facility at your home.

Requirement #2: Principal Place of Business-You must also be able to show that you use your home as your principal place of business.
– A home office is your principal place of business, meaning you do most of the work that earns your keep there. This is no problem for people like freelance writers and accountants.

– A home office qualifies as your principal place of business (meaning it’s deductible) if you use it for administrative and management activities — provided that you don’t use some other fixed location to do these chores. This rule saves the day for to independent salespeople, construction contractors, plumbers, veterinarians, computer consultants and the like, who make their dough out in the field but do their paperwork at home.

– A home office can also qualify if you use the office to meet with clients. Even if you do most of your work elsewhere, as long as you regularly use your home office for meetings.

Ordinary business expenses are deductible even if you don’t qualify for the home office deduction. If you don’t meet the rules above, you can still deduct ordinary and necessary business expenses that you incur at home — for instance, long-distance phone calls, a separate business telephone line, and the cost of office supplies and equipment.

How to Claim the Home Office Deduction
If you qualify for the home office deduction, you must figure the amount of your deduction on IRS Form 8829, Expenses for Business Use of Your Home. Then you enter the total amount of the deduction on Schedule C, Profit or Loss from Business. Attach both Form 8829 and Schedule C to your Form 1040 tax return.

Be ready to prove to the IRS that you are entitled to take the home office deduction.

• Photograph your home office and draw a diagram showing the location of the office in your home. Keep this information in your tax folder.
• Get a separate phone line for the business.
• Have clients or customers visit your home office — and keep a log of those visits.
• Keep track of the time you spend working at home.

For more on what can work for you, against you, and how to do better this year, go to our new subscriber-based web service at www.jklasser.com.

About Barbara Weltman
JKLasser.com Contributing Editor Barbara Weltman, Esq. is the New York-based spokesperson for the J.K. Lasser’s library of tax publications and JKLasser.com.

Barbara is an attorney, a nationally recognized expert on tax and small business, and a member of the J.K. Lasser Institute Team of Editors & Writers. She has written dozens of top-selling business books, including J.K. Lasser’s Small Business Taxes 2008: Your Complete Guide to a Better Bottom Line, J.K. Lasser’s 1001 Deductions and Tax Breaks 2008: Your Complete Guide to Everything Deductible.

Barbara is the publisher of Big Ideas for Small Business®, a free monthly online newsletter providing entrepreneurs with the information on issues and concerns that matter most to the small-business community, and Idea of the Day. She is also the tax and law expert for Inc.com and a contributing editor of New York Enterprise Report and PINK magazine.

Barbara serves as Staples.com’s Small Business Tax Expert. She is a member of the Small Business Advocate Brain Trust and serves on the advisory boards for Small Business & Entrepreneurship (SBE) Council, WE-Inc., Boardroom’s Bottom Line/Personal, Tax Hotline, and Bottom Line Retirement. She is an adjunct professor at Manhattanville College, where she teaches Principles of Entrepreneurship, and is a frequent lecturer at the Learning Annex.

A popular speaker on small business topics, she has participated at both local and national conferences, including the DOL/SBA’s Women Entrepreneurship in the 21st Century, SCORE’s Westchester Small Business Conference, and eBay Live!

Barbara is a sought-after media commentator and has appeared as a tax and small business expert on CNN, CNBC, The Today Show, Bloomberg TV, numerous radio stations nationwide, and podcasts for Smart Money, Forbes, and Inc.com.

She is a graduate of Brooklyn Law School and a member of the New York Bar.

As I sit here with a 3 month old asleep in the bedroom, a 9 year old bugging me about visiting her friend, a house that’s in need of a good cleaning, and client work piling up, I realize that I am not balanced. I’ve read several articles that state taking 15 minutes a day for yourself is key, but what if you can’t stay awake long enough to make it to 15? I am the queen of multi-tasking, so even if I am awake for those 15 minutes I’m also likely to be feeding the baby and paying bills online at the same time.

There are some things I remember doing that brought relaxation:

• Writing in my journal
• Watching a good television show or movie
• Reading a book for pleasure
• Taking a walk…not easy during the Chicago winters

I’m interested in hearing from the readers. Is it really possible to achieve work-life balance? If so, what are some things you do to make sure you stay in sync?

Ok…baby’s crying. Guess today’s 15 minutes are up.

This month, Entrepreneur Resources turns its small business spotlight on Mr. Brady Lewis of Spanish 4 Emergencies. During his years in law enforcement, Lewis recognized the language barrier between criminal justice personnel and the Spanish speakers they served. His company, Spanish 4 Emergencies, makes products that to ease communication between these two groups and makes working together more effective. Read on to learn more.

Name: Brady Lennon Lewis

Age: 25

Business: Spanish 4 Emergencies

Type of Business: Spanish language training tools and products for Fire, Police and Emergency Dispatchers

Years in Business: 5 years

Contact Information: Brady Lewis
32 Linden Lane
Anderson, IN 46011
(765) 642-0681
blewis@spanish4emergencies.com

What does your company do?
We have developed unique products for police officers, firefighters, EMS personnel and emergency dispatchers to aid in communicating with Spanish-speaking individuals. We also have developed an online training center to help learn the Spanish language.

What made you want to be an entrepreneur?
Since I was in high school, my friends and I have tried to come up with ideas for our own businesses. I guess it’s the dream of being your own boss, having the fancy office, having the respect and doing things the way you want to do them. It’s about freedom.

Why did you choose your business?
I was a police officer for four years. I personally started having problems communicating with Spanish-speaking individuals in my daily duties. I decided that I was going to learn Spanish for my own safety, as well as the safety of the people that I was dealing with. In my attempts to find information and products to educate myself, I found an empty market. Knowing that this was a big issue that wasn’t going away, I knew that a company like this was needed. I have a background in computers, so I decided I would start Spanish 4 Emergencies and see what I could do.

What prepared you for entrepreneurship?
I have always been fascinated with finance, business and computers. I studied computers in high school and in college. I have tried and failed many smaller-scale business attempts on my way to finally succeeding with this venture.

What has been your greatest achievement so far?
So far this year (as of February) I have been featured in front page news articles on two very popular national police and fire websites. Spanish 4 Emergencies has also done close to $50,000 in sales so far this year. I am extremely proud of both of these accomplishments.

What has been the most rewarding aspect of being an entrepreneur?
Getting the respect of people around me. Being as young as I am (25), a lot of people still tend to think that you can’t make a successful impact. I love proving them wrong. I see my youth as an asset. I still have many years in the world of business. I think I’m getting a head start on most people.

What challenges have you faced as an entrepreneur?
I have faced all the same challenges that almost every new entrepreneur faces. I started out with absolutely no capital. Therefore, I had to act as the website designer, programmer, product developer, marketer, publicist, sales, bookkeeper, etc. etc. That is very hard to do. Especially since I have had to do this on the side of my full-time job.

Is there anything you wish you’d done differently?
I wish I would have learned more about publicity and online marketing in the beginning. I started working on the company in 2002, and just in the past 6 months the company has really started to take off. I learned how to do certain things, and that made all the difference in the world. Online forums can be an absolute lifesaver!

How can others get started in this business?
Educate yourself! Anyone can come up with a great idea, but most of them go nowhere. Learn how to take an idea and make a company around it. Learn how to use EVERY available marketing realm. You don’t have to have money to get started. I didn’t spend ANY money before the company started making money. You have to have tenacity and you have to believe in yourself, no matter what other people may say.

Do you have any advice for future entrepreneurs?
It’s a tough road to go down but it is more than rewarding if you stick with it. Hard work is rewarded. Don’t get down on yourself. Find people that have done what you want to do, and ask their advice. With the Internet and online forums, you can find information on how to do almost anything. Take advantages of the resources you have. They are what gives us small entrepreneurs a fighting chance!

When you are selling a product online, good photos are crucial. The pictures on your web site will probably be the only chance a customer gets to see your products up close prior to purchase. It’s important that they look good. The best option is to hire a professional photographer, but what if that’s not in your budget? Keep reading for tips on how to take quality product photos on your own.

1. Purchase or borrow a good digital camera. Usually a 3.0 megapixel camera will do. Some retail pharmacies are even selling disposable digital cameras now, so equipment should not be hard to come by.
2. Try to shoot pictures at the highest resolution possible. This is especially necessary if you’re taking photos for both print and the web. Photos for print need to be taken at a higher resolution. Those pictures you need for your web site can always be reduced in resolution via your photo-editing software.
3. Use a neutral color like blue, black, or gray as a backdrop for your product shots. A flat bed sheet will do. That way, you or a designer can crop the background out if necessary. In this same vein, keep props to a minimum. When seeing your photos, the customer’s eyes should focus directly on your product, not the props surrounding it. Customers want to see your products.
4. Don’t stand too far away from the items you’re shooting. You’re trying to shoot the product, not the table the product is sitting on. The digital camera’s macro feature is ideal for this. It is specifically used for close-up shots.
5. Make use of the camera’s preview feature. One of best features of a digital camera is that you can preview photos before printing them. If you see a photo that is out of focus or too far away, delete it and take another one.
6. Take a variety of shots. Take some photos looking straight at the product, some at an angle, and even some with a model or customer using the product. Candid shots can sometimes be the best. Be sure to have permission before using any photos featuring people with your products.
7. Take as many shots as you can. This way you’ll have a variety to choose from. You don’t incur costs until you get your photos printed, so snap away.
8. Use good photo-editing software. It doesn’t have to be expensive, but it should let you complete basic features such as photo cropping, adjusting brightness and contrast, and resizing. Most digital cameras come with photo-editing software, or you can use a program like Adobe Photoshop Elements.
9. When getting the photos developed, purchase the additional photo CD. This CD is something you can give directly to your graphic or web designer. In addition to being helpful, you will save photo scanning fees.

By following these tips you, too, can get professional quality product shots on a modest budget.