Tax Write-Off Myth #2: Can’t Claim Tax Write-Offs No Business IncomeJul 02, 2022
When it comes to claiming expenses with no business income, it comes down to your ability to show your intention and the opportunity to earn an income. This is common advice many receive from tax preparers.
In fact, it’s so common I dedicated Chapter 6 in my book to this topic. It’s important to really understand this and why having a home-based business allows us to divert every day living expenses into legitimate tax write-offs. This is especially valuable if you have employment income and can use these write-offs to lower your taxable income. This is where these tax refunds come from!
As a home-based business we have something special that most businesses don’t have. Take advantage of it and if you receive this advice then get a second opinion.
In chapter 7 of my book The Home-Based Business Guide To Write-Off Almost Anything, I talked about showing an intention to make a profit for "tax purposes".
The government does not say how much time you need to be investing in your business, just that you have to show "an intention to make a profit" and have a reasonable opportunity to make a profit.
But there's a big difference between doing the least amount in your business to justify the home-based write-offs versus doing what it takes to generate a positive income, or even a career income in your home business.
It's important to make sure you get proper advice and have the correct recordkeeping for tax purposes to ensure you are audit-proof.
This is Myth #2 in a 7 part series:
- Myth #1: My Accountant Does That For Me At Tax Time
- Myth #2: Can’t Claim Tax Write-Offs No Business Income
- Myth #3: The Government Wants Me to Pay More Taxes
- Myth #4: If You Claim It, You Will Get Audited
- Myth #5: You Can Use Google To Find All Your Answers
- Myth #6: Tax Software Will Do All This For You
- Myth #7: Direct Sales (Network Marketing) Is Not A Real Business
Take the Mystery Out of Home-Based Business Tax Write-Offs!