After I completed my taxes this year, I want to kick myself!

About 5 years ago,  I had a successful virtual assistant business with over 30 re-occurring clients. It was a lot of work, but it was great.  In 2008, one of my top clients decided that they wanted me to work with them exclusively and was willing to pay the high bill to have such a privilege.   That was even greater!  So, I essentially closed my business and became and independent contractor. The work was challenging and interesting, my work hours were flexible and I was well paid. 

Then 2009 happened, my major client was a financial services agency. You all know what happened to businesses in the financial sector in 2009, right? Sad day for me.

Then the housing bust happened which affected my landlord's finances, but allowed my husband and I  the chance to purchase the house we were renting (it is a really nice house guys).  To top if off, my sister (who was living with us at the time) was diagnosed with stage-4 cancer. Everything was falling apart, and everything was whirling like a whirlwind at the same time.

Business was slow and new clients were few and far between. The bank said they were not accepting anymore 1099 income statements (that means independent contractors, people) with loan applications.  Unfortunately, that's all I had to show my income or lack thereof.  With a major illness, my sister did not need to be moved to a new house at this critical time.  So, I did what I had to do.  I got a regular, commuter job that issued a W-2.  

It was the solution to everything.  Our income statements satisfied the bank, the loan came through, we bought the house, we didn't have to move my sister at a critical time in her life, and the kids could stay in the schools they loved. 

However, I could not see myself (operative words here) working 8+ hours a day, commuting 2 hours round trip, taking care of a home with children and a sick relative AND maintaining--even part-time--my home business.  So I closed shop.

BIG MISTAKE!

The next year, my husband and I owed thousands of dollars to the IRS!  We had never owed that much money to the IRS before.  We were flabbergasted! But as we completed our 1040, we realized that our true financial savior was the Schedule C.

Let me tell you why:
Owning a business can really help your household's budget bottom line.  The expenses and deductions from your business are amazing, they are huge.  

 Here are the items you can deduct if you own a legitimate business:

• Office Supplies
• Office Equipment
• Other Equipment you need for your work
• Software
• Publications and Books
• Postage
• Business License
• Mileage
• Travel (get a nice hotel room because you can deduct 100% of that)
• Costs while on the road (dry cleaning, tipping, rental cars)
• 50% of eating out while traveling
• Insurance premiums (if your spouse and children work for you and are covered by your insurance it's tax deductible)
• Retirement contributions
• Half of Self-Employment tax (*You have to pay 15.3% of net profits to Social Security - but you can deduct half this amount on your taxes!)
• Phone charges
• But the Pièce de résistance is the Home Office Deduction

The Home Office Deduction:
If you can prove that you have a dedicated space just for business in your home, you can take that space, calculate the percentage it takes up of your home and deduct expenses.  

I don't think you heard me.  Let me give you a "for instance".  Let's look at my case.  I am very blessed.  I have an entire room that is devoted to my home office.  Anyone (which would mean an IRS agent, business inspector, etc.) walking into this room would know immediately that this room is devoted to being my home office.  They would know this simply because there is nothing but home office stuff in there: Desks, computers, printers, books, paper and more paper, office supplies.  There are no beds, no sofas, no TVs - nothing that says "here we relax and entertain friends." 

Now, my husband and I measured the area of our office against the appraised square footage of our home. The IRS estimates our office takes up 7% of our home.  Which means . . . check this . . . we can deduct 7% of our costs to run our home.

(These are example numbers, not the real ones -- I just made them up for easy calculation)

Heating for the year?  Why that's $2,000.  $2,000 x 7% = $140 deduction.  What?!

Alarm Service?  That's $1200.  $1,200 x 7% = $84 deduction.  Stop!

Home Repairs? Receipts total  $7,000.  $7,000 x 7% = $490 deduction.  Get out'a here!

Put window coverings up throughout the whole house?  Well, the window coverings in the office need a separate receipt because that's fully deductible! Boom!

Are you starting to see the advantages of having a legitimate home business?  Let me stress legitimate.  

Well, what is legitimate?  I'm glad you asked.

A business that you are working hard to gain a profit in.  If you can show that you are working hard to gain a profit in your business, that you actively seek clients and customers, engage in promotion of your business, work to acquire income from your business - even if you do this just one hour out of your day. . . then you are legit.  

The list of deductions I provided above for the home office, is only the beginning.  There are so many more deductions that you take when you own a home or small business.  For more on this, simply go to the IRS's webpage. IRS Home Office Deduction Sheet. Or talk to a tax professional, it will be worth your time and money to do so.  Really.

I closed my business and went all W-2.  I regret it.  

Having a regular W-2 income, being an employee really sucks! (Sorry, to all you guys contented with employee status. I'm sure it works for you -- but, it doesn't for me.)  It sucks so much that I have relented and I'm back in business again. 

Learn from me everyone.  If you've always wanted to be your own boss and start a business.  Do it!  Do it now!!!

If you have a business and for whatever reason, you are thinking of quitting and closing shop -- DON'T! 

Stay powerful and influential my friends.

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How People Are Doing It: Pat Flynn - Smart Passive Income

I started following Mr. Flynn a while ago and I must tell you that this man is impressive.  He is a person that gives full disclosure of all the things that he does to grow his online business and his income.  

I call him the King of Explaining How to Create Passive Income Online.  I'm serious.  If you want to learn how to make passive income online and do it well, you should read his entire blog, listen to all his pod-casts and watch all his videos.  It will probably take you a whole month to do that, that's how much information he provides and it's all really great information! 

People who demand money for their knowledge do not give the quality of information that Pat Flynn does. Seriously, he could demand thousands of dollars for what he gives away for free.

Can you tell that I love his website Smart Passive Income?

If you are new to passive income or online business, you should hit his START HERE tab on his website.  It begins your journey in his Passive Income 101 Series.

But the coolest thing about Pat Flynn . . . he provides detailed reports on how much income he makes.  That's right, he provides reports on what worked, what didn't work, how much he put into it and how much he gets from it each month.  So you can see how he slowly but surely grew his income over time.  It's great stuff and everyone loves those reports.

I swear once you start reading, hearing and/or watching his information, you will NOT want to stop . . . well, maybe you will because you will begin your online business empire.  

Pat Flynn is the best tool that I can possibly think of to creating powerful and influential friends, because his website and YouTube channels gives you the step-by-step to getting that way!

Check him out and let me know what you think.

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How They Do It (HTDI): Invent a Helpful Product - A Perfect Pocket!

Many of my followers are entrepreneurs, creators, inventors and business people that come up with the most ingenious stuff. I am so happy that I have these people in my life, because they show me the hundreds upon thousands of opportunities and ideas that creates the possibility to live out your dream!

I've decided to feature some of these people that are leaving their dream. Running their own business and living off the proceeds so you can realize that you can do the same thing!

Right now, I'm loving my Twitter follower @brakenhoff_lois (Lois Brakenhoff).  She and her friend of over 10 years have created a really great product called "A Perfect Pocket".  It's a pocket that you can adhere to your skin, it holds keys, money, ID . . . all the essentials you need!  Great when you are doing active things and don't have a pocket to hold your stuff.  

I'm telling you, I'm ordering this item for holiday party season.  All the best and glamorous party dresses never have pockets and I love to dance (purses just don't work on the dance floor).  

These ladies did their research to make this product perfect.  

1.  First, they registered a patent for their idea because they didn't want anyone stealing it.  Remember, I always say your ideas are precious and you must protect them.  Don't believe me?  Read my article on protecting your ideas entitle:

2.  They researched hypoallergenic adhesives narrowing it down from 35 adhesives to 4 that work.  Tested it over and over again.  They key to success and making sure everything works.  Overkill, is not a word in your vocabulary when it comes to this.  Things working properly, in any circumstance and make and break your success.

3. Got a number of focus groups to play with the product and put it through it's paces.  Feedback is essential.  No one stumbles upon success in a vacuum or alone.  Remember that.

 4.  Then they searched out many manufacturers until they found someone who could make it exactly they way they envisioned it.

5.  They featured their products in "real world events" and developed press, video, articles, photos.

6.  They created a website that helps people understand their product and allow them to order from them.  Visit: http://www.aperfectpocket.com

7.  They even created a value-add.  Companies, organizations, and events can print their logo or message on "A Perfect Pocket"!  Great idea.

I want you to know the steps that these inventors took, because you would have to do these steps as well if you invented something just as awesome and clever.  I bet you have something in mind that is just as awesome as this . . . right?  Well, what are you waiting for?  For someone else to come up with it and make a great living on your idea.  

Get going!  Your ideas should make you rich. You know I'm always in need of powerful and influential friends.


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How They Do It (HTDI): Create a Fun/Funny Product

You may or may not know this but I have over 19,000 followers on Twitter at @Telemill.  And I must say, I am impressed with many of them. Many of my followers are entrepreneurs, creators, inventors and business people that come up with the most ingenious stuff.  I am so happy that I have these people in my life, because they show me the hundreds upon thousands of opportunities and ideas that creates the possibility to live out your dream!

Have you ever thought of a crazy idea and thought the world would be a better place if you made your idea a reality?  Well, I suppose that's what Thomas Madden thought when he came up with the bright idea to put dumb-bells on eating utensils.  That's right, dumb-bells on knives, folks and spoons. The more you eat the more energy you expel by lifting the weighted food and fork to your mouth. Also, the weight of the utensils cause you to eat more slowly, which helps you to lose weight (he explains that whole thing on his website). That's way, if you use Thomas Madden's utensils, you can have your cake and eat it too . . . get it?    Genius, I say!

Meet the maker of Knife and Fork Lift.  His product turns eating into exercise!  Dumb-bells on forks and spoons and knives provides a fun way to remind people that they should be exercising. He has a lot of fun with his product on his website: http://www.knifeandforklift.com and has a twitter account: @KnifeForkLift which explains the entire concept of his fun product.  I love it!

Notice on his website that he created an LLC, a simple website, and made sure his invention was patented -- he understands what I meant in my blog post: Your Ideas are Worth a Mountain of Gold - PROTECT THEM. After some time promoting his product in health columns, health blogs and health reporters . . . Knife and Fort Lift (TM) has been featured on the Today Show (see the video on his website) and MSNBC!

Simply put, he created a really funny product and promotes it online. You can take this same model and create something equally as fabulous and just as fun.  I give kudos to Thomas Madden and to all you wacky inventors out there taking a page from the Book of Thomas Madden and creating fun products!


Telecommuting Millionaire's? HTDI Series (How They Do It) 
My intention is to feature a person at least every week that I think is living their dream as an example that you can also live your dreams. I'm trying my best to get you on your way to becoming an amazingly successful, financially free, and joyfully happy person.  Remember, I'm counting on YOUR success because, I've always wanted powerful and influential friends!



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Your Ideas are Worth a Mountain of Gold - PROTECT THEM

A Quick Introduction to Copyright, Trademark and Patents.

If you create something, anything, you should have a rudimentary understanding on how to protect your stuff, your ideas . . . your gold.  No, literally your idea is golden, and could be worth a lot of money! The first thing you should do after writing it down, is protect it.

A simple name could gain you a life-time of wealth. Did you know, that after the 50th Anniversary of Marilyn Monroe's death, her name and "brand" (that's a marketing term for "identity" for you and me) is still worth millions today?  Companies like Authentic Brands spend tens of millions of dollars (that's $10,000,000+ to you and me) to acquire famous people's identities and rights to use their likeness!  You can read the article about Marilyn Monroe's brand here.

So, if you are a daydreamer that's great . . . dream. If you are an inventor, that's great invent.  If you are a creator, then do your thing! But, make sure your stuff is attributed to you and no one else. Here was what I've found about the topics of Copyrights, Trademarks and Patents.

So, here is what you need to know in a nutshell.  All three "intellectual property" classes are registered with a federal agency.  They give the creator "exclusive rights," which means that the owner/creator has the rights to earn money or use the item, and most importantly -- prevent anyone else from using or profitting from the creation.

Here's the difference between the three:

Copyright = someone's original idea in recorded fashion.  It can be in writing, computer code (program), lyrics, photographs, recordings.  A copyright is automatic and placing the copyright symbol (c) and "All Rights Reserved" on the item is enough to protect your work.  But it's best to register your copyright with the Library of Congress - http://www.copyright.gov.  Copyrights can and do expire after a lifetime+ 70 years.

Patent =  are for inventions.  The invention must be different from anything else (or at least have components that are different from anything else).  It must be useful and can't be obvious.  One must register the patent with the Patent & Trademark Office - http://www.uspto.gov/patents/ to gain full protection.  However, it can take up to 6 years to get an invention registered and can cost over $10,000.  Patents can be sold as an asset (like a house or stock).  A patent is only good for 20 years.

Trademarks = are for identity or brand protections - basically, it protects the identity of a company, service or product.  A trademark describes something, but is not the actual something.  It can be a word, name, symbol or device used to identify something.  Many say that you don't have to register a trademark, just attaching a TM symbol next to the mark gives you "common law" rights.  However, one must register a trademark to gain full legal protection.  It costs around $350 to register a trademark and can take from 6 months to a year to fully process. Register a Trademark or Servicemark at http://www.uspto.gov/trademarks/.  They can be renewed, so technically a trademark can live on forever and never expire. Good news for Coca-Cola right?

Seriously, people make great money copyrighting, trademarking and patenting . . . An example from an article entitled: 5 Everyday Things You Won't Believe Are Copyrighted:

"The most famous case is sports announcer Michael Buffer, who currently makes more money from his phrase "Let's get ready to rumble" than he does from actually announcing boxers and letting them know that there might be rumbling. He's reportedly made $400 million by licensing his phrase to movies, commercials, video games and such."

Can you believe that!  That could be YOU.

I'm only outlining a quick introduction to this topic because I think it's important that (in your goal for financial freedom) you know about these tools that can help you.  It's important because these very tools can help you make a profit from your ideas and hard work and protect your ideas and hard work which will allow your family, for generations, to benefit from your hard work.

Please, please people.  If you create something, invent something, work hard to develop something; you should look into and use any of these three protections before you present any of your work (in whatever form it may be) to another individual or to the public in general.  Protect yourself, you'll be so glad you did!

For more information on copyrighting, trademarking and patenting your stuff, I'm listing a whole bunch of resources below.  Please, bookmark this page and refer to it often.  I want us all to live happy, prosperous lives with well protected ideas that will afford generations of success.

UPDATE:  Read Arthur Frommer gets his brand name back from Google.  And see what can happen if you don't protect your work and your brand.  Very good article that illustrates exactly what this article is about.  Protect your ideas people!

Good luck and remember, I'm counting on YOU to become prosperous because I've always wanted influential friends in powerful and rich places.


The Information You Need:

Patents, Copyrights & Trademarks For Dummies Cheat Sheet
www.dummies.com/how-to/content/patents-copyrights-trademarks-for-dummies-cheat-sh.html

About.com Intellectual Property
http://inventors.about.com/od/patenttrademarkcopyright/u/Intellectual_Property.htm

LegalZoom Intellectual Property Page
http://www.legalzoom.com/trademarks-patents-copyrights/trademarks-patents-copyrights.html

Nolo Press Patent, Copyright & Trademark Do It Yourself
http://www.nolo.com/legal-encyclopedia/patent-copyright-trademark

Ipl2 (The Internet Library) Patents, Trademarks, Copyright, Public Domain, and Fair Use
http://www.ipl.org/div/farq/patentFARQ.html

U.S. Small Business Administration on Intellectual Property
http://www.sba.gov/content/intellectual-property-law

National Paralegal College Courseware on Intellectual Property
http://nationalparalegal.edu/public_documents/courseware_asp_files/patents/menu_patents.asp

Protect your gold!


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Getting fat and lazy

Q: What are the pitfalls that home business owners need to be most vigilant against?

A: I think complacency. Like, "Oh, I've got it all happening now, the checks are rolling in, the clients are lining up." And not keeping the pipeline filled, not continuing to do all the things in my marketing plan, showing up at three networking events a month, continuing to speak twice a month so people know that I'm out there, continuing to publish a newsletter. Getting lazy when the checks are rolling in or the big accounts are there.

CNN spoke with entrepreneur, speaker and home-based business coach Jane Pollak

http://www.cnn.com/2007/US/04/30/pollak.interview/
So basically, you are telling me that when the money begins to roll in that I have to put even MORE effort in making it continue? See, that's why people don't TRY to become rich. THIS is why people have a "fear of success."

Success is a bitter web that pulls you in and never lets you go. There is no pausing, their is no stopping to smell the roses . . . it just makes you keep going and going and going . . . just to maintain. So, tell me Jane Pollak, when is the stopping point? When can a person stop and enjoy the fruits of their labor, the riches they gain?

Basically, success is a trend mill at a 24 hour/ 7 days a week gym.

Picture by Ted Abbott
http://www.flickr.com/photos/ted_abbott

Tele-Jobs: Arise

The provide virtual call-systems.

However you define this growing trend, Arise has set the standard providing thousands of home based businesses with the freedom to answer calls, e-mail and chat requests for prestigious U.S. and global companies. This company provides Customer Service, Sales and Technical Support.

This a legitimate company. The downside of using this company for employment, you have to become incorporated to participate in this opportunity. Why? Because they hire you as an independent contractor and they want to make sure the IRS does not come to them and accuse them of having you as an employee. So, to cover their bee-hinds, they make you spend money to incorporate your new home-based business. Not a bad thing actually, but it can get very involved.

Go to their website and make sure you read all about it before applying.

Arise Virtual Solutions Inc.
http://www.arise.com

You May Wish to Read About:

Other companies that offer Telecommuting Jobs

Starting a business with $0

"It takes money to make money"

We've all heard this before and it's true to an extent, but . . .there are people that began construction businesses with just a shovel; there are people who began a salon with a comb; there are people who sell food to millions that started from a home oven with one burner working.

Heck even the largest business successes today: Craigslist, Kinko's, UPS and Yahoo had meager beginnings:
Craigslist began in 1995 as an e-mail newsletter to Craig Newman's friends -- telling them about cool events around San Francisco like the Anon Salon and Joe's Digital Diner. It spread through word of mouth, and became large enough to demand the use of a list server, majordomo, which required a name -- his friends suggested calling it "craigslist" to reinforce its personal and down-to-earth nature. Over time, people started posting items on the list.

from Craigslist History Page

Kinko's began as a low-price copy shop for college kids in Santa Barbara. It was founded in 1970 by Paul Orfalea, a self-described mechanically inept and dyslexic, "C" student at the University of California. He leased an 80-square-foot former hamburger stand in Isla Vista, near the campus of the University of California at Santa Barbara, and rented a small Xerox copier, charging customers four cents a page.

UPS was founded in 1907 in Seattle, Washington, by 19-year-old Jim Casey as a bicycle messenger service called American Messenger Company. Casey delivered telegraph messages and hot lunches and sometimes took odd jobs to keep his struggling business going.

Yahoo! Inc. got its start in 1994 as the hobby of two Stanford University students who were writing their doctoral dissertations. Jerry Yang and David Filo, spent much of their free time surfing the World Wide Web and cataloging their favorite Web sites. In doing so, they created a Web site of their own that linked Internet users to Yang's and Filo's favorite places in cyberspace. At that time, their site was called "Jerry's Guide to the World Wide Web."

Histories are from: http://www.fundinguniverse.com

If they can do it, you can do it too. And damn-it, if I can do it (I began a business with virtually no money) then I know you can do it -- and do it better!

This technique of starting a business with zero or little money is called bootstrapping -- and I've done a lot of it. This article is the beginning of a series to help you begin your home business. Because there is no excuse for you not to begin your business today.

This series will be titled: "Begin with Zero."



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