Online Incorporation MaxBlog

Many of the reasons you decided to start a home business are apparent: you can set your own schedule, work in your comfort zone and save yourself the cost of renting office space.

Another benefit that should not be discounted, however, is the ability to deduct many of your expenses. Be careful of going overboard with these deductions, lest you find yourself on the wrong side of the IRS.

At the same time, though, knowing the common home office tax deductions can help you preserve your small business budget.

1.            Utilities

This will include a percentage of your utilities, based on how much of your home is used exclusively for business. Exclusive is the key word here. Part of the dwelling must be set aside for business use only, so working on a laptop at your kitchen table does not qualify.

2.            Household Repairs

If your business involves customers or clients regularly visiting your home, you may deduct a portion of household repair and maintenance costs as a small business expense.

3.            Rent and Mortgage

Both homeowners and renters can take advantage of these deductions, provided at least one room in the dwelling is set aside for the home business.

4.            Insurance

According to the IRS, if your home is your “principal place of business,” a portion of your homeowner’s or renters insurance cost is deductible as a home business expense.

5.           Your Car

If you use your personal automobile to travel to business meetings or make deliveries, the cost of upkeep, insurance and gas can be deducted. Be aware, however, that if the automobile is also used for non-business purposes, you will need to track your business-specific mileage, and only that percentage is deductible.

The importance of providing true and valid usage of your home and automobile for small business purposes cannot be overstated. IRS audits can and do happen, and should you find yourself on the receiving end of one of these, the auditor will expect to enter your home and see proof that you have a least one room dedicated to your home business.

As long as you are honest, however, you can successfully save a portion of your small business budget by using the appropriate tax deductions.

Naming your new business is probably the biggest decision you will make about your budding enterprise…it’s what the world will know and remember you as so you want it to be practical and memorable too.

And you will want to spend some time thinking about this too – don’t simply go with the first thing that pops into your head or your gut instinct. Chat it over with friends, do some research and come up with several ideas before making a decision.

Before doing any of this though you may want to do a trademark/name search to find if there are any other businesses out there using that name. You would hate to go through this arduous process just to find out that someone already has that name and has trademarked it.

Incorporating a business with a trademarked can be a costly mistake – at minimum you will be forced to change names and incur all expenses with doing that.  Next, you could be sued by the trademark owner and if you use a federally registered trademark improperly, you could really be in trouble. In this instance, a court will assume you knew the name was federally registered and consider you a “willful infringer,” meaning you could be put on the hook for large damages and the owner’s attorney fees.

If you choose to incorporate a business online with MaxFilings, we do a preliminary name check as part of our online incorporation process.

However, save yourself the trouble before hand when you’re deciding on what to call your new venture and do a quick trademark/name search (U.S. Patent and Trade Office) for your new business or products and also do some general searches on the Internet to see how the name is being used. You can also use a fee-based service like Thomson’s SAEGIS database.

Whatever you do, look into it…it will save you in the long run.

Have an idea for a business but unable to secure the needed financing? The threshold for borrowing from banks has gotten tighter in recent months. And, it’s best to avoid high-interest options like credit cards and predatory lending.

Micro-lending is an option available to moderate and low income entrepreneurs. Funds from micro-loans can be used for a wide range of startup and operating costs like purchasing equipment, marketing, licensing fees and insurance to name a few.

Micro-loans through the U.S. Small Business Administration (SBA) average around $13,000 while the maximum you can borrow is $35,000. Repayment takes no more than six years and interest rates vary depending on the intermediary lender but generally are between 8 and 13 percent.

All credit decisions are made by an intermediary at the local level. If you’re interested in applying for a microloan, contact your local SBA microloan intermediary.

Accion USA is a non-profit, private sector source for microloans…they provide loans from $500 to $50,000 to business startups and small businesses. The average loan is $5500. They work one-on-one with you to help build a solid credit history and get your venture off the ground.

Kiva.org is an organization where individuals can donate small amounts (i.e. $25-$50) and see who it’s going to and how they’re using it. Choose an entrepreneur in either the U.S. or the third world to support – you can receive updates as to how they’re using the funds, their progress and even repayment.

After obtaining a micro-loan to get you started, online incorporation service MaxFIlings.com can help you form a corporation easily for minimal cost.

Looking for some simple explanation of federal small business taxes? Click over to the online incorporation knowledge center at MaxFilings.com for an overview of the next most certain thing in life next to death.

Federal taxes a small business may be subject to depend a lot on its structure (i.e. C corporation, S corporation, LLC, etc.) along with many other factors.

Four different types of taxes a small business could be exposed to include

1. Income taxes – required for all individuals and businesses (except partnerships, who file an informational return).
2. Self-Employment taxes – primarily affects the self-employed
3. Employment taxes – small businesses with employees
4. Excise taxes – required depending on various conditions, usually for businesses who manufacture certain things or are in a certain industry.

Read Four Types of Federal Taxes Small Businesses Should Know About – And Where to Find Information from the IRS today in the business incorporation knowledge center at MaxFilings.com for more insight and links to further information about this complex subject.

When forming a corporation, you want to have all the knowledge you can to make the right decisions…but finding the right ones that will be helpful can be very time consuming.

An article in Entrepreneur Magazine’s April, 2009 issues – Best Resources for Startups – lists 4 resources every aspiring entrepreneur, and even those who are well established, should be familiar with.

1. SCORE – A nonprofit organization with over 400 chapters that provides free mentoring online and in-person. Consists of nearly 12,000 working and retired entrepreneurs and business people.

2. Small Business Development Centers – Located across the country and usually connected to a university, these organizations provide consulting for just about any facet of managing a small business.

3. Small Business Administration – Federal government agency that provides an array tools to help new and aspiring entrepreneurs succeed. It’s recommended you start with their Start-up Assessment Tool to help find the right resources.

4. U.S. Chamber of Commerce Small Business Center – An arm of the U.S. Chamber of Commerce that provides comprehensive assistance for startups through web-based tools and resources.

These are just a few of the many resources out there…but, they’re most likely the most reliable for accuracy and impartiality.

In addition to these, online incorporation service MaxFilings.com has an expansive online incorporation knowledge center that has many helpful articles that make sense of incorporating a business– check it out and then use MaxFilings’ online system and form your corporation in just minutes.