How to Deduct a Home Office

Distance Education Helps You Get Ahead

CanadianMedsWorld.com

NEW YORK -- One of the most tempting but also terrifying small business tax deductions is for a home office _ deducting the cost of operating out of your home can help you save on taxes, but complying with IRS regulations can be a little daunting.

Accountants say the good news is that the deduction, which used to be considered a fast way to an audit by the IRS, doesn't raise red flags with the government as it did in the past. Still, business owners often make mistakes trying to claim the deduction that can grab the attention of the tax authorities _ something every taxpayer wants to avoid.

Stephen Fishman, an attorney and author of "Home Business Tax Deductions" said a common error company owners make is to try to deduct space in their homes that has both business and personal uses. That won't fly with the IRS.

"You have to use the space in your home exclusively for business," Fishman said.

An office with PCs and a fax machine isn't the only way to take advantage of the deduction for using your home for business. If you manufacture goods or store inventory in your home, the space you use for that can also be deducted. The same applies if you run a business like a day care center or nail salon in your home.

You don't necessarily have to have a separate room for your office or business space, but taking the deduction is less complicated if a room is indeed set aside for business purposes. For example, it might be hard to convince the IRS that the home office in part of your family room is never used by your children to do their school work or play computer games.

Whatever the space is, it must be regularly used for your business. It doesn't have to be your only place of business, however.

An owner with a home business can deduct the expenses used to maintain the business space _ the portion of utilities, mortgage interest or rent, insurance, repairs and maintenance and other expenditures that can be attributed to that space. One of the big pluses of a home business deduction is that you can also depreciate the portion of a residence used for business; normally, a residence cannot be depreciated.

To determine how much of their expenses they can deduct, most owners divide the total square footage of the home by the square footage allotted to the business. For example, if 5 percent of a house was used for a business, and the owner had $5,000 in expenses for the entire house, then $250 could be deducted.

But square footage is another way owners can run into trouble with the government _ for example, if it appears to the IRS employees examining your return that your home business space is too big for the kind of business you operate, they may question the size of your deduction.

If you're thinking of claiming the deduction, you need to get yourself educated about the IRS' requirements. The first thing you should probably do is download and carefully read IRS Publication 857, Business Use of Your Home, from the IRS Web site, http://www.irs.gov. There are also several small business and home business tax guides available in bookstores that can give you a grounding about the deduction.

Also take a look at the IRS form you'll need to file, 8829, Expenses for Business Use of Your Home, and its accompanying instructions. They can also be downloaded from the IRS Web site.

It's probably a good idea not to try to claim the deduction without consulting a tax professional. Jeffrey Chazen, a tax partner at the accounting and consulting firm Richard A. Eisner & Co. LLP in New York, noted, "there are little quirks you have to look out for" with a home business deduction.

For example, he noted, if you've been depreciating the space for your home office but now sell your home, you'll have to "recapture" the depreciation, or adjust the profit you made on your house to account for the tax break you already received.

Another, important quirk: Your deduction cannot be larger than the net profit you make. But you can use the excess to offset profits in succeeding years.

Chazen suggests that now, as you're preparing your 2006 tax return, isn't the time to be thinking about the home business deduction for last year. If your business space didn't already meet the requirements for the deduction, you can't shoehorn it in after the fact.

You can, however, start working now so you can claim the deduction for the 2007 tax year.

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Commuting And Marketing

Distance Education Helps You Get Ahead

CanadianMedsWorld.com

There is a great article in the April 16 New Yorker magazine on commuters. The writer put in a few facts — which got my salesman’s mind reeling — and a lot of Studs Terkel-style “man in the street” profiles… which offer a psychological portrait of an increasingly average Americann consumer.

As a marketer, you should always jump on info like this. It’s priceless demographic knowledge, explained in a way that keeps the humans involved at the center of the story.

Here’s the gist: According to the Census Bureau, one of every six Americans now commutes more than 45 minutes each way to work. Over 3.5 million travel 90 minutes or more… each way. (That’s double what it was in 1990, when the last census was taken.)

That’s a LOT of time in the car, sitting on your ass.

My take: They can’t read, can’t watch DVDs, can’t watch TV, and have limited patience for learning while crawling through jams.

Still, a good percentage are going to be YOUR customers. A literally captive audience, potentially.

This used to get radio advertisers all excited… but radio ad revenue is plummeting, after years of cramming so many obnoxious ads into each hour that people just stopped listening to commercial radio. (Radio does this slow-suicide dance every decade or so — recently, the average talk radio station had more ads than talk each hour. They just push it until they lose listeners, and then scramble to become “relevant” again. Dumb. But it’s the way the biz is run.)

People learn to zone out, or jockey around the dial, or escape to commerical-free satellite radio and CDs. (Or NPR, which is hit-and-miss on being interesting.)

Think about it: Frazzled, frustrated people hating thier lives, forced to stay awake during a routine drive that is too unpredictable to lose focus while you’re suffering through it.

These are people with a problem — essentially, wasted hours that cannot be replaced. It’s purgatory. Quiet desperation.

For savvy marketers, this could represent an opportunity to be the most exciting part of your prospect’s day.

Back when I worked for The Man, I had opportunities to sit in “parking lot” traffic jams in Silicon Valley (on the 101 between Palo Alto and Santa Clara), and the 405 nightmare between the SoCal beach cities and the Sunset Blvd offramp (which includes LAX). Two of the most notorious and horrific commutes in the country.

If you have NOT experienced true traffic psychosis, you probably should go sample it.

Just to understand what it is many of your customers are going through.

Why? Because, for most information products (and even many services), you can and should be providing audio options. (There is also a place for audio with retail products… if you do it right. Most physical products — especially high-ticket items — are only purchased after information is digested.)

But there’s a caveat: You need to understand your prospect’s state of mind, in order to create a CD or mp3 that doesn’t create a disconnect in his head.

And this goes for both audio products, and for audio pitches.

Most smart direct marketers know that providing audio versions of their products can increase sales dramatically. Many people simply prefer audio over visual (whether it’s reading or watching video).

Very few entrepreneurs, however, have yet realized the opportunities for putting your pitch into audio format. That is changing, as test results come in.

But I know of few marketers who tailor their audio for commuters. And thinking about how commuters digest audio input will help you in EVERY effort to communicate clearly and effectively, regardless of the format.

Here’s the key: Your presentation must be in short, identifiable chunks – because your listener’s concentration will be constantly interrupted by sudden braking, the need for snap decisions, and occasional outbursts of road rage.

Keeping things in chunks means any rewinding is brief, and there are no long, delicate trains of thought to be shattered.

Most of the audio I’ve heard — both in products, and in the few audio pitches I’ve seen marketers produce (mostly via podcasts, but sometimes through downloaded mp3 or snail-mailed CDs) — make the outrageous assumption that your listener has the luxury to “sit back, relax, take the phone off the hook, and listen to a tale…”

I’ve actually critiqued a LOT of ads over the years that use pretty much that identical language.

So get straight on this: Online and offline, your prospect is never in a place where he can — or wants to — sit back and listen to you ramble.

Both pitches and products should be as long as necessary to deliver what is needed for your prospect or customer to get the desired result. So, yes, I still write very long emails, Web site copy, and print ads… but they never RAMBLE.

And I present very long workshop seminars, teleconferences and Web conferences. And this “never ramble” tactic is the key to making them all work.

It may require some time to make your point… but in all cases, you still need to GET to your point immediately. And stay there, without wandering off on tangents.

Even long-copy ads — when done right — deliver bite-sized chunks of info… tied together in fascinating ways that ensure your reader stays with you. (The “Bucket Brigade” technique of holding interest.)

But you do not want to overwhelm him with stuff. Give him a little bit of info, help him digest it… and smoothly segue to the next bit of info. Navigating your reader through a pitch (or the info in your product) is very much like running along uneven terrain.

Consider how you would run along a mountain trail next to a river. Lots of rocks, gopher holes, tree stumps, puddles… you can’t rush mindlessly headlong toward your destination, or you’ll quickly stumble.

You can still move quickly… but you’ve got to pay attention to each step.

In copy, each chunk of new info is a step. Present your point, make your point, tamp it down in your reader’s brain… and then smoothly transition to the next point.

That’s the key to making long copy work.

So when you create audio — which is just “spoken” copy — that you suspect (or know) is going to be consumed in the car… don’t construct elaborate arguments or points that require long-term memory. (The all-too-common “I’ll get back to that in a minute… but first, I want to tell you about…” tactic is a sure sign you’re dealing with a rookie copywriter.)

When you deliver your material in short, digestible chunks, you can go on for hours and never “lose” your listener. This is how master communicators command attention fro long periods.

The commuting culture — which ain’t going away anytime soon — is a target audience that hasn’t been fully tapped. These are people who are ripe for certain products and services… if only the info can be delivered in a way that doesn’t make their brains bleed.

Commuters listen to books, and sometimes attempt to learn foreign languages. There’s no reason why they can’t consume your info product, too… or listen to your pitch.

Here’s a nice exercise to do in your spare time: Consider all the products that could be put on audio for consumption in the car (or on an iPod during a train ride).

Audio is different than reading… but the tactics for delivering content are the same.

Okay, I gotta go pack.

Stay frosty.

John Carlton, http://www.marketingrebelrant.com/

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How To Make $1.3 Million Dollars Selling Retro Cards

Distance Education Helps You Get Ahead

CanadianMedsWorld.com

http://mikwright.com/

As owners of MikWright Ltd., a Charlotte, North Carolina-based greeting card company, Tim Mikkelsen, 45, and Phyllis Wright-Herman, 44, employ a group of friends and neighbors to glue old family photos to off-size greeting cards. The duo then writes humorous, snarky captions for the 1950s, '60s and '70s-era pictures.

Sounds like a simple, old-fashioned kind of operation, right? Well, it is, except for the fact that the company sells its products in more than 10,000 retail locations around the world and generated sales of $1.3 million last year.

Despite the fact that they could easily afford to mass-produce their products, the owners feel it's important to keep the same production methods they've used since launching the company in 1992. "There's not a machine that can guarantee the quality control that a human can," says Mikkelsen. "We're not looking to be this huge conglomerate. It would change who we are and what we do."

[Via - Dane Carson Blog] 

Inspirational Women in Business
The Question You Should Ask Yourself Every Day

Is Nature a Marketing Guru?

Distance Education Helps You Get Ahead

CanadianMedsWorld.com

Technology rules. Yeah, for about five minutes--then natural instincts take over. Are you stupid enough to fight Mamma Nature? Well go ahead and rewrite the rules if you can, cause the Big Mamma knows one thing. She’s tried and tested it all. And if you want to play by her kooky rules, she is willing to teach you a thing or two.

The question is, are you willing to learn?

Do You Pay in Advance?
Have you noticed how big a brand Red Bull is today? Or how insignificant their advertising is? Red Bull shuns print advertising and has never done a triple back flip on a web campaign. Yet, it has found roots in over 50 countries. And has cemented its loyalty in the fickle land of teenagers.

So what’s Red Bull’s big secret?

It’s called GIVING.

Their marketing strategy was simple. They enticed students with free cases of Red Bull, if they threw a party. Guess how many students need an excuse to have a party? With a simple act of giving away free cases to the right target audience in the right universities, Red Bull became a very rich Red Bull.

Yet Where Are Most Marketing Plans Aimed?
Too often marketing is aimed solely at GETTING. Look at all those marketing plans, those many advertisements blaring away on the radio and TV. It’s get, get -- all the time!

Yet, nature pooh poohs the stuff. Putting a carrot (not cart) before the horse, nature works on the giving part first. In its own little marketing and advertising way, a flower works contrary to most marketers. Using the bait of colour and nectar, it draws the bees, knowing full well that its very existence depends on giving bees what they want first, so the bees will carry their pollen.

Wander down the supermarket aisle and you’ll see what I mean. Fifty thousand brands stare at you, screaming at you to buy them. Then a little ol’ lady offers you a sample of a product. Fifteen seconds into your tasting session, she gives you another sample. Then, for no apparent reason, a bottle or two of the product finds itself in your cart. Were you sold? You betcha!

Giving works for a simple reason. Nature hates imbalance. If the deer get faster, so do the cheetahs. It’s a classic system to keep things in balance. Which effectively means that to create an imbalance in marketing in your favor, you’ve got to give first.

Are You Ready To Do the 1-2-3 and Cha-Cha-Cha?
Do you play the dating game? Or do you rush in to conquer most of the time? Mamma Nature knows that haste makes waste. Yet marketers think nothing of blowing squillions of dollars on various hare-brained, get-rich-quick schemes that achieve far less than their potential.

Here's an example. Harley Davidson has been to hog hell and back. Just in time to save its bacon, it decided to work on the cha-cha-cha instead of the wham, bam method. The reward has manifested itself in thousands of die-hard Harley fans that would go all the way on their Harleys. Even today, despite being in an enviable position, Harley still finds time to wine and dine its customers while thumbing its nose at traditional media.

Another good example of cha-cha-cha marketing is how the British operated in the 19th century. Instead of slamming their way into conquering new lands, they went as traders. Whether history likes it or not, they maximized their potential in a systematic and natural marketing manner.

What Happens When Nature Goofs Up
Even nature loses out when it fails to obey its own rules. As long as it sticks to its spring, summer, autumn, winter routine, we go along with the "relationship." Yet every time it does the 60-second prime time TV spot on us, we absolutely hate it. Oh sure, there’s great colour, drama and pizzazz in a whirling tornado, but there’s zero empathy and a whole lot of defiance.

Turn on the music, move those feet. This isn’t some behemoth CRM program we’re talking about. Diamonds are a girl’s best friend, but flowers arouse less suspicion. Do the cha-cha-cha and the getting to know your customer. It’s cheaper, it follows steps, and it works.

Is Your Target Audience "Everyone?"
Nature would laugh at you and laugh heartily. Are you setting yourself up for disaster or what? Even a pimple-ridden 13 year old knows exactly who her knight in shining armor is. While the concept of being in the company of 20 gorgeous men would set her eyes alight, her brain knows better.

Yet most businesses horrify the heck out of Nature. In an apparent suicidal move, they go after a general audience in order to maximize their returns. Some of the biggest brands today are built on single-minded focus. Mercedes, Volvo, Rolex, McDonalds, Red Bull and Playboy all have a clearly defined target audience.

If you doubt it, take a look at a wild dog attack on a National Geographic broadcast. Have you noticed the focus and strategy of their attack? They single out the prey and go after it in a pre-defined relay system. It gets results, and isn’t that what you want?

Gotta Keep on Dancing
When was the last time your heart stopped beating? And isn’t that good, because if it did, you’d be taking harp lessons in a big hurry. Nature doesn’t stop its marketing campaign and neither should you. The first thing businesses do when the economy takes a downturn is pull the plug on marketing. Fat good that’s going to do you! That’s like telling your heart to work at half the heart beats when things aren’t good.

The planet doesn’t stop rotating, the trees don’t stop growing and the fish don’t stop swimming. Yet in an absolute violation of the most basic law of nature, we stop and start like some trainee driver.

There Ain’t No One Like Me!
Nature doesn’t brand-extend. It creates something and then it throws away the mould. When it creates a product, it makes sure that product thrives, grows and multiplies. It adds colour, shape and size for a bountiful variety, but brand extension is a no-no.

Yet look at some of the biggies out there. They put out their brands and then put their names on everything from computers to soap. Dove still stands for soap with 1/4th moisturising cream. Yet, in the supermarket, Dove tries to take on the full force of nature by brand-extending.

Does it work? Yes and no. People have too much clutter in their heads already. To add to that clutter is asking for trouble. Our brains identify with one object when we are given a name.

From Nokia to Chimpanzee
When I say Nokia, you say mobile phone. Yet Nokia sold everything from gumboots to computers -- even TV sets. Then one day it dawned on them that they could conquer the world with a brand name that stood for one thing and one thing alone.

Sure a chimpanzee and a baboon are both monkeys, but they’re essentially different products. You won’t find a chimpanzee light or a chimpanzee diet in the species. They’re either chimps or they’re baboons! Besides, their unique brand name allows you to identify them with zero confusion every time! Uniqueness is your brand’s birthright. Use it well.

Here are some "Au Naturel" guidelines to business and marketing strategy:

1) Pay in Advance: First you shall sow, and then you shall reap. And you must sow in fertile ground not on rocky soil. Give, and you shall receive. Does this all sound familiar? Are you giving away anything worthwhile on your website, through your advertising, in your brochures?

2) Do the dance one step at a time: You’ll just make a fool of yourself if you don’t build up your reputation with your customers. Give them the best you possibly can. When nature puts on a beautiful butterfly, it starts with a worm.

3) Put on the glasses: Get focus in your life because Nature will make sure you pay big time if you don’t. Sure you can get business, but think of what’s possible if you focus. A little focus right now reaps long-term rewards. It’s your choice.

4) She’s only happy when she’s dancing: Is that a Bryan Adams song? Or is Nature telling us what we should be doing? She’s on the floor. Go on and boogie.

5) And then there was one: Is your fingerprint different? Is your iris different? Do you have a clone? Nature doesn’t think it works in real life. Why do you think differently?

6) And finally: Take off your headphones and look at what nature is saying.

It’s showing you the colour of money!

By Sean D'Souza, http://www.psychotactics.com/

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The Microcredit Boom

Distance Education Helps You Get Ahead

CanadianMedsWorld.com

Muhammad Yunus, founder of the Grameen Bank -- which grants microloans to millions of poor people -- says he dreams of a day "when nobody will be a poor person." But he believes in capitalism and entrepreneurship to achieve this.

"By defining 'entrepreneur' in a broader way we can change the character of capitalism radically, and solve many of the unresolved social and economic problems within the scope of the free market," Yunus said when he accepted the Nobel Peace Prize for his "efforts to create economic and social development from below."

"Let us suppose an entrepreneur," Yunus continued, "instead of having a single source of motivation ... now has two sources of motivation ... a) maximization of profit, and b) doing good to people and the world."

In the United States, microlending is often achieved through credit cards because formal microlending is too expensive administratively for traditional banks. But many of the neediest people don't have credit histories, and credit cards have very high interest rates.

The Clinton administration introduced a microloan program to be administered primarily by nonprofit organizations that interfaced directly with low-income communities. Since then, the Bush administration has repeatedly zeroed out the microloan budget.

Fortunately, bipartisan support in the Senate, led by Sens. Olympia Snowe (R-Maine) and John Kerry (D-Mass.), restored funding -- a mere total of $2 million for fiscal year 2007 in direct loan funds (used to leverage another $28 million of private money) and $10 million in microloan technical assistance.

In 2005, the Small Business Administration-backed microloan program resulted in 2,474 loans averaging $13,042 and totaling over $32 million. About 45 percent of the loans went to women.

You can help support microlending in the following ways:

• Encourage groups in your community to start and support microcredit programs.

• Donate to microcredit organizations.

• Spread the word. Tell your fellow entrepreneurs and members of community, religious, or ethnic groups.

• Urge your elected officials to support the U.S. microloan program.

You'll find a directory of microenterprise programs in your state, along with other resources on microcredit, at the web site of the Aspen Institute.

Microcredit works. Yunus and Grameen Bank have proved that helping hard-working poor people borrow small amounts of money to start their own businesses can change a community -- whether in Bangladesh, Boston, or Boise.

Go to source.

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