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by Linda Overstreet


The chance of being audited by the IRS is only one-half of one percent, and taking advantage of the full range of home-business deductions should not increase your odds.

If you have a fulltime job in addition to having a home-based business, your deductions may exceed your home-business income by thousands of dollars. That means that your home-business would report a 'net loss' for the year.

That's perfectly legal!

But, if your tax return turns out to be the 1-in-200 selected for an audit, make sure you're prepared. You do not have to produce a profit in order to qualify for thousands of dollars worth of home-business tax deductions, but you DO have to be able to prove that you are TRYING to make a profit.

The IRS calls this 'proving your profit motive' or 'profit intent,' and the very best way to do that is to have a written Business Plan.

If you're like most people who have a home-based business, you've never written a business plan before. But without one, it may be hard to convince the IRS that you have a legitimate Business (not a hobby!) and that your intent is to produce a Profit (not just tax-deductions!).

It's not too late to write one that would give you full 'audit protection' for the entire tax-year 2001, because the date you
put on the cover of your Business Plan is the date you started your business, not necessarily the date you wrote your Plan.

Since having a Business Plan is worth thousands of dollars to you, I don't want you to put off writing it, so I've made it easy for you...

If you've never written a real Business Plan, you might want to use the fill-in-the-blanks draft included in the Appendix section of 'It's How Much You KEEP, That Counts! Not how much you Make.'


If you use that draft as your guide, and if you cover all the categories presented in that draft, you'll have a plan that meets IRS requirements for proving your 'profit intent.'

That 'intent' can be worth thousands of dollars in tax deductions, year after year.


Remember... 'It's How Much You KEEP, That Counts! Not how much you Make.'

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