Midwifery Business Tax Deductions
The most expensive bill you will ever pay is taxes to the government. If we can cut your taxes from 35% to 10% your hard earned income, would you be interested? Owning business and real estate are great ways to cut your taxes down LEGALLY! Being a W-2 earner in the corporate world is the HARD way to make money. Starting a business or negotiating a 1099 independent contract position as a midwife has so many rewarding benefits including tax deductions. There are only a few things that can be written off from working at someone else’s company. Let me shed some light onto possibilities of owning your private midwife business.
Business Expense and Personal Expense
When starting a business, it is so important to know what can be a business expense and what is a personal expense. Starting a limited liability company (LLC), there are certain things that need to occur to keep the liability protection from your personal assets. In Michigan, yearly meeting minutes need to occur. Renewal application needs to be completed and personal funds can’t be mixed with business funds. You can pay yourself from the business for services, but not use business credit card to buy personal things like groceries or house utilities.
There are many things that used to be a personal bill that now can legally be a business expense like cell phone, mileage on car for traveling to home visits, portion of home for office space, and much more. I am not an accountant or lawyer, please confirm with your state laws with a professional to make sure these tips work for your specific business structure.
Keep Track of all Expenses Paid from Personal Funds
When starting your business, keep track of all expenses paid from personal funds to create the midwifery practice. It can be paid back a lump sum loan to the business or a payment plan. There needs to be documentation in a loan showing what has been purchased over time and create a loan promissory note. Dining, entertainment, and supplies purchased for the business are all common business expenses that midwives pay for out of their hard earned income. It is much smarter and easier to have the business pay for those expense prior to taxes than after.
Look at life and see what is a business expense that may not be written off that way. Have your midwife business pay for parts of your life used to work at the clinic. Analyzing these little deductions can have massive rewards in regards to more cash in your pocket. Work smarter, not harder in life!