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Taxes Make good on your New Year’s resolutions with a home-based business

Have you made any New Year’s resolutions for 2019? A friend told me that his one resolution this year is to be more optimistic by keeping his cup half-full all the time – with either rum or whisky. Another told me that he’s going to conserve water in 2019 by doing less laundry and wearing more deodorant. I didn’t think either of these was for me.

Some of the most common New Year’s resolutions include getting more exercise, eating healthier and getting more quality sleep. Other than these, it’s interesting to observe that 10 of the most common resolutions can be achieved by setting up a home-based business. Consider establishing some self-employment at home in 2019 if any of the following resolutions are on your list:

1. Get a new job. Although home-based businesses are often part-time, you may also consider working for yourself full-time at something you love to do. If you’re intent on leaving your current job in 2019, creating your dream job working for yourself may be an option.

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2. Take up a new hobby. A friend of mine loves to make jewellery, and often makes gifts for friends. She’s decided to launch a website to sell her unique creations, and will be attending craft and home shows to sell her products. A hobby can also be a business if you have a reasonable expectation of earning profit from the activity. This can allow you to deduct amounts that you couldn’t otherwise, including vehicle costs and home-related costs such as a portion of mortgage interest, property taxes, insurance, utilities, landscaping and more.

3. Earn and save more. One of the most popular New Year’s resolutions is to earn more money, and save more. Each dollar you earn in a home-based business can be a very tax-efficient dollar because of the deductions you’ll be able to claim to offset the income. What you do with your additional earnings is up to you, but contributing those dollars to a tax-free savings account (TFSA) or registered retirement savings plan (RRSP) is a great idea.

4. Get out of debt. Many Canadians rely on their employment income to make ends meet, without much being left over at the end of the month to pay down existing debt. Consider using additional earnings from self-employment to pay down your debt over time. You may also consider making the interest on your debt deductible by using your self-employment earnings to pay down your existing debt, then reborrow to make investments.

5. Boost self-confidence. If you lack confidence, perhaps because you’ve been out of the work force for a while, or for any other reason, there’s nothing like being paid to add value to someone else’s life to improve confidence levels. Self-employment from home can help with this.

6. Meet new people. When my friend Rob decided to start a part-time business renting himself out as a party clown (and Santa Claus at Christmas) he had no idea how much fun it would be meeting so many different people. Whether you want to be a party clown, music instructor, dog-walker, e-book author, bike repair specialist or anything else, you’re sure to meet many interesting people in your business.

7. Learn something new. Starting a home-based business can be an amazing opportunity to learn about something new. That’s right: You don’t have to already be an expert to earn money. A friend of mine decided to make money selling specialty coffees. He knew next to nothing about coffee when he started. He’s busy and earning good income from the business today.

8. Read more. While you might want to read some fiction in 2019, also try reading up on the industry and creative ideas that interest you most when it comes to a home-based business. Have fun learning how to take your interests and turn them into income. Check out the Small Business Trends website at smallbiztrends.com for some great home-based business ideas (search the term “business ideas” on the site).

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9. Travel more. Want to see the world? Your small business may allow you to do just that, and deduct a portion of your travel costs. Attending conferences, visiting suppliers or customers and checking out competitors, among other things, may require some travel on your part. The portion of your travel related to business (keep an itinerary of time spent on business activities) can be deducted.

10. Stop procrastinating. Starting a home-based business may itself be the perfect opportunity to procrastinate – but don’t let that happen in 2019. Create an emotional connection to the idea of working for yourself part-time by looking at the things you can accomplish (see the nine resolutions above), and you’ll find yourself up and running in no time.

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca.

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