Financial Benefits of Owning a Home Business

Starting your first home business may be scary.  You may be unsure of what your doing or how to do it.  You may be unsure of a lot of things, but it will be worth it.   If you have learned anything from the articles on this site, you know that we believe in “Being your Own Boss”.   It is the first step to being successful in life, and definitely required if you are going to be wealthy and free.

So what are some of the things you need to know about starting your first home business.    Let’s start with the first major benefit.

Pay less income tax

How do you keep more money in your pocket?   

Well, it has to do with the tax system.  It is designed to have employees carry the tax burden.   As an employee, you will pay more and more taxes the more money you make.   In North America, the top 10% of earners pay over 54% of all taxes in Canada, and a whopping 70+% in the US.   You can find the details in this Financial post article:  http://business.financialpost.com/personal-finance/taxes/heres-what-the-wealthiest-of-the-wealthy-in-canada-earn-and-pay-in-taxes

So don’t let the media tell you that the rich don’t pay their fair share of the taxes.   It’s a lie!   The rich carry the tax burden.   The rich “employees” carry the tax burden of society.   Now, I’m not against paying taxes, but this is a little ridiculous.    If we work hard and produce, we shouldn’t be penalized by a bloated government for our success.   The number one benefit of owning a business is….

You pay less taxes!

Here is how it works.

Employee		Self Employed
Salary	100,000	Income	100,000
Income Tax	25,000	Expenses	50,000
Expenses	50,000	Income Tax	8,400
You Keep	25000	You Keep	41,600

You see, when you own a business, you get to deduct your expenses before you pay income tax.   This can amount to a huge tax savings and results in you KEEPING more of your hard earned cash.  (Disclaimer:  I am not an accountant, please use your accountant to determine the exact savings).   As an employee, you have pay income taxes on your salary, and your expenses are deducted after the government gets their share.   In this case you keep a lot less.

It’s also important to note that the expenses as a self employed business owner, are usually the same as your expenses as an employee.   For example:   Car expenses, fuel, gas, portion of your rent or mortgage, etc.

The next big benefit is…

Saving time

How much time do you spend in your car commuting to work?   The north American statistics in major cities state that the average commute is almost an hour a day.   In some big metropolitan areas, that commute can be well over an hour one way.   Being self employed working at home, can save you as much as 2,400 hours a year or 100 days.   If you work at a job for say 25 years, that is 2500 days, or 6.8 years of your life spent commuting to work.   What could you do with that time?

Flexible Hours

Be your own boss and choose when you work and control your own destiny.   When you’re the boss, you can work whenever you want.   You control your time so that you can spend it with your kids when you like, or simply wake up when you want to.

Get Control

The bottom line is that when you own the business, you control your life.   It may take a little more discipline and motivation, but it is definitely worth it.

Get Wealthy,

Wealthy’n Free Leader