Women in Agriculture & Small Business Conference
Published on Nov 18, 2015
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PRESENTATION OUTLINE
The information provided on and made available through this presentation does not constitute financial advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances.
Dixie Agostino, CEO
Switchgear Search
& Recruiting
Started her own engineering recruiting business in 2010
Photo by jacsonquerubin
turn a hobby into a business
Most hobbies cost money. Find a way to turn your hobby into a business
Do something you enjoy in your free time
Some hobby businesses turn into full time businesses
Turn many items you’d purchase anyway into tax deductions
Disclaimer – Consult a Tax Professional
Photo by NatureNerd (probably outside)
IRS requires that a business shows “intent to make a profit”
As long as intent is there, business can show a loss
In most cases, that loss can be a deduction against your personal income (up to a limit).
Losses are expected the first 2-5 years.
Photo by Alan Cleaver
Donna LOVES antique shopping and design projects.
She spends 4-5 hours a week on this hobby
Does not incorporate - DBA “A Little Something Design”
She hits flea markets and craigslist and looks for things she loves. She restores some of them.
She puts them on etsy to resell
Her favorite pieces are priced high… she displays them in her house until they eventually sell
She sews curtains & dress-up clothes to sell (first making a “sample”, which goes to family)
Family members enjoy them and provide advertisement
Photo by Hammonton Photography
The small amount of income Donna receives is offset by her deductions:
Mileage to/from her favorite flea markets.
Deducts travel expenses twice a year when she and a friend go to a huge flea market in Texas.
Purchase of books, classes, admission to events, etc. that is related to her business is deductable.
Sewing classes, sewing machine, fabric, etc
Photo by Damian Gadal
Tom loves airplanes, and loves to restore old WWII warbirds
He buys a new plane every few years, spends money restoring it, maintaining it, etc.
During this time he lists it in airplane magazines for top dollar.
Eventually, he lowers the price to sell… sometime making $, but often losing $.
He’s turned the restoration & maintenance expenses into a tax deduction
Photo by Kacper Gunia
Brenda loves public speaking & personal development
She writes off new outfits for every speaking engagement
Business expenses include travel, lodging and meals to and from her speaking events
She is also able to list as a business expense conferences, training, coaching and professional/personal development as well
Offering to speak in trade for value or pro bono is an option as well
Pete is a born handyman and is passionate about restoring older homes
Pete has two options with the properties he selects: “fix & flip” or “buy & hold”
Business expenses now include all his tools, cell phone, pick-up truck, vehicle insurance, vehicle maintenance and mileage to/from the property locations
Legal fees, consultants, and professional education/training are all business expenses
He can also write off his internet and some of the square footage in his home as a home office
Travel and trips to see other properties can also be a business expense
If Pete lives in the house for 366 days (1 year & a day), he will not pay capital gains tax on the profit he sees.
Photo by Luke,Ma
Think about what you LOVE to do
Would you still love it if you got paid to do it?
Can you do something very similar and turn it into a hobby business?
Can that hobby business generate at least some revenue?
TALK TO A TAX PROFESSIONAL
In most cases, a loss from a side business can be taken as a deduction on your taxes (up to a limit).
If you’re employed elsewhere, you don’t have to take a salary (unless you’re generating a set amount of revenue)
Photo by Chrissy Downunder
DAVE RAMSEY'S 7 BABY STEPS
1. Save $1,000
2. Debt "snowball"
3. Save 3-6 months emergency fund
4. Invest 15% of household income into Roth IRAs and tax-advantaged retirement accounts
5. College funding for children
6. Pay off house early
7. Build wealth and give
DEBT SNOWBALL EXAMPLE
Using this method Sallie Mae was paid off over 2 years early!
If you continue investing the $846 for the next 26 months and then stop; in an investment averaging 10% in 35 years it will be worth $544,655.95!
FINANCE 101 - TOOLBOX
Budget (One month at a time)
Will (Share with those who are part of it!)
Life Insurance (10x income)
Be Intentional (What works for you in particular?)
Photo by hermitsmoores
RENTAL PROPERTIES -
SELECTING RENTERS
Get this book. Seriously, no joking, do it. https://www.nolo.com/products/every-landlords-legal-guide-elli.html This has all the forms, procedures and legal advice to save you mega bucks from mistakes
Check credit history, criminal background, employment history and previous landlord references
Photo by MarkMoz12
Always meet your tenants face-to-face
Do not price your property cheap. Good tenants know they get what they pay for.
The best tenants have great work tenure, excellent references from previous landlords (who are not their mom), small or no pets and will improve your property.
Photo by Ron,Ron,Ron
RENTAL PROPERTIES
- TAX DEDUCTIONS
Interest
Depreciation
Repairs
Local travel ($56.5 cents per mile for everything related to your property)
Insurance
Casualty & theft losses
Legal & professional services
Employees and Independent contractors
Photo by StockMonkeys.com
Cell phone/office phone (a portion used for your rental properties)
Home office
Long distance travel (carefully scrutinized by IRS)
Can still use your vacation home as a rental if only use it 10% or less of the time it’s rented
Photo by anieto2k
RENTAL PROPERTIES - HELPFUL WEBSITES
http://www.buildium.com/tax-deductions-landlords-2014/
https://turbotax.intuit.com/tax-tools/tax-tips/Rental-Property/Real-Estate-...
Photo by Robert S. Donovan
INVESTING IN STOCKS
AND MUTUAL FUNDS
What gets measured gets looked at
Tally your assets -
At least yearly
Compare growth to S&P
Asset Allocation -
Don’t know what is going to give highest return next year
Spread your assets
Photo by AndreasPoike
Resources
Better Investing -
No advice
Sound investment information, education and support to help you take control of your financial future.
Magazine
Online tools to analysis stocks and mutual funds.
Books – see samples
BI encourages investment clubs – proven successes
BetterInvesting.org
Photo by photosteve101
Resources
Valueline - stocks
Free at library (Hardesty, Downtown)
Email Amy Dumalag at adumalag@tulsalibrary.org
3 stocks at a time
Morningstar – mutual funds & stocks
On line at library
Portfolio analysis - helps know asset allocation
Use to rebalance
Photo by Marcus Hansson
PLEASE CONSULT YOUR CPA
Photo by InternationalHouseManchester
