You ask, "Okay, I'm starting a small homebased business, not a huge million dollar International Conglomerate! But should I incorporate or keep it a proprietorship?" Actually, there are arguments in favor of either decision. This argument will be in favor of the proprietorship.

The first thing is that you need to know there is a totally different set of laws, regulations and tax law that governs proprietorships and corporations. And for the small business entrepreneur the tax advantages offered during the first 5 years are enormous. After 5 years you are expected to begin showing a profit but this is not necessarily "written in stone". Let's take a closer look at some of the advantages of a proprietorship.

If I were to show you how a one-time $439 USD investment could gain you from $1000 to $2500 in tax refunds and write offs per year would you be interested in learning more? Okay, here goes.

If you are a blue or white collar worker, a doctor, lawyer or other professional, can you write off on your taxes the gas and other travel and parking expenses you accumulate driving to and from work? Your lunch expenses? Your home office? Travel and vacations? Any part of your household utilities expenses?

The answer is NO - you cannot write these expenses off your income tax.

If you start a business, a proprietorship, working out of your home, call it "your name consulting" or whatever seems to fit best, you are now able to write off all of the following:

Automobile mileage
Gasoline
Other car maintenance
% of automobile depreciation*
Home office (as a % of your home)
% of home utilities expenses
& of your home telephone bill
Entertainment expenses
Vacation expenses
Meals
*100% of a Leased Car
And more, these are just the bigger ones.

There are, of course, conditions. You cannot go on vacation and simply "write off" all of your vacation expenses. You must "share the information" about your product or service with others while you are on vacation --- more than just "passing out business cards --- and you must also keep records of every contact you make. This will also help you with follow-ups.

These contacts, with whom you are sharing the details of your business service or product, are the contacts that will validate your write off. You should have at least two a day while on vacation. Who? The barber, your golfing partners, beautician, people you meet in the store or casually just about anywhere? All you have to do is talk

Copyright © 2004 Windy Dawn Marketing and Windy Windblad

About Loring: Loring Windblad is a published author, columnist, freelance writer and successful HBB entrepreneur over the past 40 years. His latest HBB involvement is with Organic Greens. http://www.organicgreens.us