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Small Business Income Tax

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Mileage Rate Increase. Here's a good one. If you use the Mileage Method to calculate your vehicle deduction, the IRS has done you a favor by increasing the mileage rate. In 2007, the rate was 48.5 cents per mile. Effective January 1, 2008, the rate was increased to 50.5 cents per mile. On July 1, 2008, the rate was increased again, to 58.5 cents per mile.

Because there are two rates for 2008, the most accurate way to calculate your mileage deduction is to do two calculations: January-June miles TIMES .505 PLUS July-December miles TIMES .585.

If you did a good job of tracking your mileage during the year, this calculation should be no problem. You just add up your mileage for the first six months; then do the same for your mileage for the last six months.

Section 179 Increase. More good news. When it comes to deducting business equipment (aka "fixed assets" or "capital assets"), Section 179 is the small business owner's best friend. It allows you to forget about all those complicated depreciation rules and simply deduct 100% of the asset's cost in the year of purchase, just like your other operating expenses like office supplies, utilities, wages, etc.

There have always been several critical limitations and restrictions to the Section 179 expense deduction, so be sure to consult with your accountant or read up on it yourself (IRS Publication 946, "How To Depreciate Property", is a good place to start for free information on the topic). For example, there has always been a limit on the amount of the Section 179 deduction. The limit has been gradually increasing over the past several years, from $100,000 in 2003 to $125,000 in 2007. The 2008 limit is a whopping $250,000, so there's a pretty good chance you don't have to do depreciation on your return again this year.

Self-Employment Tax Increase. This item is not so good. If your business is a sole proprietorship (i.e. you file Schedule C) and your profit is at least $400, you must pay the dreaded self-employment tax of 15.3% on that profit. This 15.3% tax is made up of two parts: social security tax of 12.4% and Medicare tax of 2.9%. You must pay the Medicare tax on all your profit, regardless of the amount. But there is a limit to the profit amount subject to the social security tax. In 2007, that limit was $97,500. In 2008, that limit increased to $102,000. (And just so you know, the 2009 limit has already been increased to $106,800).

These rules about the social security tax portion of the self-employment tax also apply to employee wages and salaries. If your business is a corporation and you are paid as an employee of the corporation, the amount of compensation subject to social security tax has also increased from $97,500 in 2007 to $102,000 in 2008 (and to $106,800 in 2009). So all business owners, regardless of entity type, are affected by this change, which in effect, is a tax increase.

Small Business Income Tax

Running a home based affiliate business can be very rewarding. It is practically promoting someone else's product, service or website with the luxury of staying at home. It can earn you commissions on leads, referrals and sales. It is also one of the most cost-efficient investments available for new business ventures. There are a lot of affiliate programs available. They can be a banner ad, a graphic, a text, or a link of a particular website among others.

The Benefits of a Home Based Affiliate Business

Affiliate programs are great home based business opportunities for just about anyone. You do not have to manufacture a product or think of a profitable service to earn money. You do not need to worry about how you are going to deliver the product or collecting payments from customers. All that will be taken care of the company you work with. You do not even to leave your house nor stand up to generate income. All it takes is marketing and public relations skills.

How to Start Your Home Based Affiliate Business Right

Some advertisements say that affiliate marketing can easily earn you a lot of money from home. Well, it does not. Although an affiliate marketing business can give you big numbers in your paycheck, it is by no means an easy task. You will need a lot of time and effort to make it work. Here are a few tips to start your business right:

Create a website. To start off your business, you will have to create a good website with informative content. Here, you can place ads, links and other marketing campaigns to promote the products and services of the company you are affiliated with.

Review your options. You should then take a look at your options the programs and techniques that will suit your website. Ask yourself, how many links can I put without overcrowding my page? Is there any space for banners and advertisements? Will links work for me? Having the right tools will spell the difference for your business.

Look for reputable affiliate programs. You need to make sure that your affiliated companies can be relied upon. This will help you build your own good reputation. There are a lot of reputable marketing programs available so make sure you find quality programs that will help your business growth and stability.

Find ways to generate traffic to your website. Marketing is, by no means, pulling a rabbit out of a hat. It takes a lot of planning to find people to visit your site. You will have to employ means to attract them to visit such as putting your links on other sites. The more people that visits your site, the more chances of getting a sale.

Keep track of your progress. It is also important to keep records of your business progress especially at the early stages of your business. This will tell you how effective the marketing techniques you are using and if there are changes to be made.

Do not relax when your business is finally starting to pick up. Affiliate businesses require maintenance. Do not stop looking for other merchant companies that you can affiliate yourself with to help your business expand. Pretty soon, your home based affiliate business will definitely keep your money rolling.

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About Author

Both Wayne M Davies & Daegan Smith are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Wayne M Davies has sinced written about articles on various topics from . Looking for more small business tax tips? For a free copy of the 25-page Special Report "How To Instantly Double Your Deductions", visit

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