| Your Hundred-Fold-life is progressing well then you | | | | With most businesses, the only items that can be |
| realize, that one of the biggest fears shared by most | | | | purchased free of sales tax are those that are |
| home business owners is the dreaded letter from the | | | | intended for resale or those that become part of |
| Internal Revenue Service saying they doubt the | | | | another product during the manufacturing process |
| information contained in your personal or business | | | | before being resold. Paper towels, toilet paper and |
| income tax return. This can be made even more | | | | hand soap, even if used in the business, cannot be |
| difficult if you combine trips to the store to pick up | | | | purchased tax-free. When the auditor looks through |
| things for your home office and your home at the | | | | the books and finds these types of receipts not only |
| same time. It will become nearly impossible to keep | | | | will you be responsible for the unpaid taxes, but there |
| every receipt you have separated for home and | | | | will probably be interest charges and penalties tacked |
| business and can lead to unintended inclusion of | | | | on to the total. |
| household products on your list of business expenses. | | | | Another often misunderstood taxing problem is |
| One of the most effective ways to separate them is | | | | forgetting to pay local sales tax, in addition to state and |
| to have a business account separate from your | | | | federal taxes. While some communities do not have a |
| personal account and treat it as off limits to personal | | | | local sales or income tax, there are many that do and |
| expenses. Whenever you run to the store and buy | | | | failing to file and pay any due taxes is punishable by |
| something for the business, pay for it from the | | | | law. You may also need a business license before |
| business account even if it means having the clerk ring | | | | operating a business in many communities, which is |
| up separate transactions. This way, if a receipt is lost | | | | there way of knowing who is making money in town |
| you can show the bank account transactions to IRS | | | | and who to look for when it comes time to collect |
| auditor and hope they understand about lost receipts. | | | | taxes. |
| You will also need to become fully educated on what | | | | If you cannot afford a tax consultant, and plan to do |
| business related expenses can be charged as a cost | | | | your own taxes, it may behoove you to buy business |
| of doing business and which ones do not qualify for a | | | | tax software to prevent overlooking anything that |
| deduction. Too many times have people believed that | | | | could get you in trouble with the taxman later in the |
| something they took home and used in their home | | | | year. Staying out of hot water with the IRS is |
| office could qualify as a business expense, only to | | | | important to the success of your Hundred-fold-Life. |
| learn too late that it is not considered a business | | | | Keeping track of all expenses can save you money |
| expense for the type of business they operate. Sales | | | | on taxes, but making sure you pay all the appropriate |
| tax is one of the most misunderstood items on the IRS | | | | taxes due can keep you out of trouble. |
| list. | | | | |