This is the first of many case studies in the new tax cut laws that will be made. Because every tax return is slightly different, we have to look at many situations to understand the full benefit of bot the tax cuts and having a home based business.
We are looking at a single person earning approximately $80,000 in a job. Owns a home and has no children.
Applying the Trump Tax Cuts, this person will save $866 in taxes for 2018.
Considering that most tax cuts and economic stimulus packages in the past really never saved more than $300 for a single person, this is a pretty good savings compared to that.
However, if you want a bigger tax cut, let’s add a home based business to the mix. I have been doing home based business returns for over 40 years now, so I can accurately estimate the tax savings based on average deductions for this person.
When we add the business to the mix, this person saves an additional $1,377 per year on their taxes for a total of $2,243 in tax savings.
That is almost $200 per month, which would go a fair way for most people.
The two learnings from this are #1 – The Tax Cuts for 2018 are decent and #2 – Add a home based business and get a bigger tax cut!
PLUS: The home based business tax cut never expires!
If you want to learn more about lowering your taxes with a home based business CLICK HERE