Thursday, September 8, 2011
Tax Benefits of an SDI Enterprise
Many conventional business people have been disillusioned by high income tax and tremendous amounts of red tape and government inefficiency. SDI entrepreneurs are sheltered from the high administrative costs of doing business for the “home office” of the respective SDI company commonly hires people to keep track of the monthly sales volume.
Could the tax sheltered incomes of SDI entrepreneurs foster a quiet tax revolt and eventually reduce the oppressive powers of government? The prospect of a world with less government is a cause for rejoicing all by itself!
When SDI entrepreneurs start their home-based enterprise they become independent entrepreneurs. They are not employees. As owners of an SDI enterprise, they are entitled under the Income Tax Act to deduct certain expenses incurred in attempting to build their SDI enterprise. Indeed, there are significant deductions available to active SDI entrepreneurs.
Obviously, business expenses can only be deducted when an SDI entrepreneur is truly building an enterprise. This translates to mean that the harder one works at ones enterprise, the greater the tax benefits. Becoming an SDI entrepreneur in this 21st Century, gives wage-earners numerous tax advantages - especially if one is an employee and while operating a part-time SDI enterprise.
Since the SDI industry commonly promotes part-time enterprises, SDI entrepreneurs have a tremendous advantage of being able to deduct business losses from other wages or salaries.
It has already been established that most enterprises incur significant losses in their early years, SDI entrepreneurs can reduce their overall tax bill significantly when they launch a part-time, home-based enterprise.
“Tax losses” are not to be confused with “cash losses.” It is possible for an SDI enterprise to earn cash profits and still have “tax losses.” SDI entrepreneurs incur “tax losses” by deducting the expenses of using one’s personal assets (house, vehicle, telephone, computer, etc.) in building one’s enterprise. A large portion of these expenses can be deducted as business expenses if one is seriously building an SDI enterprise.
Keep in mind that one would normally have these expenses even if one is not building an SDI enterprise.
An SDI enterprise qualifies for the normal business expenses and much more. The normal expenses associated with any wholesale/retail enterprise are: (a) cost of merchandise (b) supplies (c) office expenses (d) interest and bank charges (e) advertising (f) professional fees (g) industry publications etc.
In addition to the above, normal, business expenses active SDI entrepreneurs have additional tax benefits:
Since SDI entrepreneurs are in the field of direct selling, as an owner of one’s own independent enterprise, one is permitted to deduct a portion of the operating costs of a vehicle - licenses, insurance, interest fees and depreciation. Active SDI entrepreneurs have very little personal use of a vehicle since they “live” their enterprise all the time by seeking to expand through enrolling new SDI entrepreneurs and/or marketing products and/or services.
As an active SDI entrepreneur with an office in one’s place of residence, one qualifies to deduct a portion of the cost of the following items: (a) heat, light and electricity (b) house insurance (c) mortgage interest or rent (d) property taxes (e) maintenance (f) security (g) any other expenses incurred to operate your residence.
Depending on how much space one sets aside for the enterprise, the deduction can be significant.
An enthusiastic and eager SDI entrepreneur is always seeking to expand his/her enterprise. Since most SDI opportunities are now operating globally, active SDI entrepreneurs are encouraged to enrol people from different countries. So why not take the business “on the road,” “on the track,” ‘on the water,” or “in the air?”
This feature is unique to the SDI industry. When one takes one’s enterprise with him/her, the travel expenses are deductible. When one travels one must, of course, travel with the intention of expanding one’s enterprise. CRA officials cannot prevent one from enjoying oneself on any business trip!
Wages To Family Members:
A functioning SDI enterprise demands that routine weekly tasks be completed by someone. One can pay reasonable wages to one’s spouse and/or children etc. Always make sure that any conditions required are met before this deduction is claimed. For example, if any family member earns more than a specified limit, then one must reduce the personal deduction for them on the income tax return.
Entertainment and Promotion:
If, in attempting to expand one’s enterprise by enrolling new SDI entrepreneurs, one incurs entertainment expenses, then one is permitted to deduct such expenses. For example, if one takes prospects (potential SDI entrepreneurs) or retail customers to a restaurant to discuss an SDI opportunity and/or selected products, any business expense incurred qualifies as a business deduction. If one invites prospects to one’s residence for dinner and an SDI business opportunity is discussed, the costs of the food and drinks is deductible.
Just as each SDI entrepreneur’s circumstances differ, so does the extent of one’s business deductions. It is recommended that any SDI entrepreneur seeks professional help in preparing the annual income tax returns. The fees for this service are deductible and one can better spend time enrolling and coaching new SDI entrepreneurs or selling products.
For updated and detailed explanations of permissible tax deductions available to SDI entrepreneurs, it is recommended that advice be sought from a competent chartered accountant - who is familiar with the SDI industry.
I trust that readers can now view the SDI industry with a deeper understanding. I welcome readers to continue doing research on the SDI industry in general at the SDI Eye Opener. Maybe some readers are ready and willing to commence an SDI Portfolio and take enjoy prosperity while taking advantage of the tax benefits unique to the SDI industry.
“For those who believe, no further explanation is necessary. For those who don’t believe, no explanation is possible.”