Sunday, January 31, 2010

Put a Pencil to the Cost of Working!

I have been asked this question often over the years that I have worked at home. Of course the answer is going to vary depending on your personal circumstances and exactly what type of work you are doing at home. Your CPA can give you the best advice on which is the best for your circumstances. 

Lets start with your work space: If you are just working from home with a home office, you can write off everything in that office on your income taxes. You can take a one time deduction on your equipment or you can pro-rate it over a number of years.

You can also deduct all the costs of heating, air conditioning, any maintenance and furnishing of this space (ie: new flooring, locks on the doors, business furnishings) but be sure that you do not have this area also set up as a spare bedroom with a bed in it or you will not be able to declare it as an office.In my particular case, I have taken one of the bedrooms in my home and converted it into an office. There is no question that it is strictly used as an office.  Desk, bookcases, file cabinets, separate phone line, a shredder and locks on the door.

Perhaps you are running a daycare out of your home. All the rooms that you use for the children in the daycare facility can be written off as business space. I know someone who has not only a large playroom but who also utilizes their livingroom and a bedroom for her daycare. The diningroom where they all eat their breakfasts and lunches as well as her kitchen for meal preparation and one separate bathroom away from her family's bathroom are all able to be declared as business expenses. In her backyard are outside play equipment for that specific age group she cares for, as well as inside toys which must be replaced from time to time.

I know a gentleman who is a draftsman who has a home office and must have a drafting table set up as well as a separate phone line to conduct business. 

Some people will require a "land-line" while others can just utilize a cell phone for their businesses. My advice is to not mix your business with your personal calls on the same phone line, in case you might be questioned at tax time.

Eating Out: this is a biggie!  By working at home you save a lot of money by not eating out all the time. When you figure approximately $4 just to eat at a fast food place daily that is $20 a week or $100 per month. Many people tack on another $2 easily for a coffee to go in the morning and a soft drink for the drive home. That is an additional $10 per week or $40 per month (figuring 4 weeks in month) So now we have $140 X 12 which is $1680 per year!  Adds up fast doesn't it.

Child Care Services: If you need to have someone watch just one child you are looking at anywhere between $150-350 a week easily depending on where you live. If you have more than one child, some daycare providers will give you a discount for more than one child, but if you have one still in diapers or in the process of being potty trained (that they have to train) you are looking at more. So lets just say $225 a week for one child for the sake of argument. Times that by 4 weeks and you have $900 a month just for childcare.Now figure that times 12 months and you have $10,800 a year.

Wardrobe:This can also be a costly item, especially if you are new to the workforce or reentering the workforce after being out awhile. You will be needing an appropriate work wardrobe. The most practical will be to get items that can be mixed and matched with one another and that can be washed in the washing machine and dried in the dryer with minimal or no ironing required. So lets figure things on the low side, a couple pairs of nice slacks and maybe a couple skirts, several nice blouses, a sweater and a blazer jacket. A nice coat, 2 pr of shoes (1 heels, 1 flats) a nice purse. I am going to be conservative, really conservative and say $500 for everything. Then add in $5.50 a week for the laundry and upkeep on these items and we'll prorate the cost at $ 63.67 per month for your wardrobe costs. Now this doesn't take into consideration adding on to your wardrobe or replacement costs of any items, this is just initial outlay. You will be spending approximately $764.04 a year.

Gasoline: Figures show that the average person drives 20-25 miles to work every day one way. I am going to use what we pay now in Oklahoma $2.47 per gallon and 24mpg as an average and 24 miles one way.... so a gallon of gas to get to work and another to get home. that's 2 gallons per day $4.94 X 5 days equals $24.70 per week x 4 weeks $98.80 a month for a total of $1185.60 for the year.

We still haven't taken into consideration car upkeep such as oil changes, tire replacement, etc, at 48 miles per day, you will be putting approximately 11,520 on your car each year which is going to mean you are going to do at least 3 oil changes on your car and more likely 4 in a year if you change your oil every 3000 miles.An oil change runs $30X 3 that's $90 a year, plus at least one set of tires $500 most likely or more so lets just round that to $600 a year

Beauty Shop or Barber Shop:Fellas I know you guys get to the barbershop at least once a month to get your ears lowered! Not sure what it costs you nowadays but my guess is probably at least $15 if you leave at least a little tip! The gals probably spend at least $20 when they go and probably only go every 3-6 months for a haircut. So lets figure the guys spend $180 per year and lets figure the gals get a haircut every 4 months and theirs would run $60 per year. And for our work at home scenario we will figure it is the lady of the house that will be working at home.

So here goes
Cost of meals          $ 1,680.00
Child Care (1 child)   $10,800.00
Wardrobe               $   740.00
Gasoline  *2 gals day  $ 1,865.60
Car Upkeep             $   600.00
Beauty Shop            $    60.00

Total                $15,745.60 Minimal Cost for you to work

And I know that I haven't included everything!

So now you figure if you have a $20,000 year job and they are going to be holding out 23% of that for your taxes and FICA withholding ($4600) That leaves you with $15,400 and you are paying $345.00 for the privilege of working!

Kinda scary when you see it all broken down in black and white isn't it?

I think there is something wrong here don't you?  So start thinking of ways that you can work at home, deduct some of your expenses of working at home from your tax base, and keeping more in your pocket!  Even if you earn $20K working at home and your withholding goes up to 28% because you are self employed, $5600 withheld giving you $14,400 left....... you now have cut out all the expense of above that you had to spend just for the privilege of working!

Now I want you to do your own real life calculations. Figure out all the things that you would need to spend money on in order for you to enter or reenter the work force. How much you would spend on lunches, that cup of coffee on your way to work, the soda on the way home, the additional maintenance on your vehicle and the gas to and from work and the cost of putting your child/children into daycare.  You tell me if it is truly profitable for you to work outside the home.

Why not share with us what you come up with, I know I would be interested in hearing from you!

Wednesday, January 27, 2010

AMBER ALERT............. Please Read!

The Oklahoma FBI is searching for Aja Danielle Johnson, white female, age 7, born 1/5/2003. She is 4 feet tall, brown hair and eyes, 65 pounds.

Police are looking for Lester William Hobb, white male, age 46, born 2/20/63, 6’1”, brown hair (receding hair line), green eyes, 190 pounds. Possible moustache and goatee, with tattoos: Tony, left forearm and wings on his chest. He is considered extremely dangerous, and may be armed.

The abduction took place in Geronimo, OK., enroute to Rockport, TX.

Hobbs is driving a white 1995 Toyota Paseo with Oklahoma license plate number: 577bpw. He was last heard from in Geronimo, OK.

Aja is considered to be in grave danger and immediate danger. Anyone either in Texas, Oklahoma, Louisiana, New Mexico, Arizona, California or oregon that sees this man and/or car are asked to call the Oklahoma FBI at 1-800-522-8017 and your local Sheriff or Police Department.


An Amber Alert was called for all over the state of Texas and within hours it was lifted. This gave rise that the girl was found, and Hobbs arrested, but that wasn’t the case, and still isn’t.

The Amber Alert is only used in conjunction with other states when it is felt/believed the missing child may be in their state, otherwise no alerts are given. This is why I, and a couple friends here feel strongly about a National Amber Alert, that stays in full force until the missing child is found and returned home before it may become far too late.

So I propose this to you, and challenge you to do the right thing. Take what I have written, go door-to-door in your neighborhoods, get signatures, as many as you can when you have the available time. Enlist friends and family to help. A minimum of 1,000 signatures for small towns/communities, and a minimum of 5,000 for medium sized cities, and 20,000 or more for heavily populated areas. That, or set your own number/goal, for where you want this to be. Online petitions have no merit, but in this way, it’s many voices being heard at one time.

From there, mail out notorized copies of the petition,  with signatures to local city council members, State Representatives, Senators The Attorney General’s Office and the Office of the Governor of your respective state.

This Amber Alert can be for the entire North American Continent, so those of you in Canada should do the same thing. It’s the right thing to do.

Kids are the life-blood parents pour their heart and soul into, and no matter how hard parents do their very best, sometimes even then, the best just isn’t good enough. It takes less than a minute to abduct a child, and often, days, weeks, months; a lifetime to ever find and return them home again.

Post this on your blogs, make others aware. It’s time to stop the face’s on the milk cartons. It’s time to stop the fears of if he/she is still alive. It’s time we set a standard that we won’t take it any longer.

**********To Whom It May Concern:
The undersigned do hereby demand that a National Amber Alert for missing and exploited child(ren) be immediately passed by law, by each individual state and by both the House of Representatives and Congress post haste. This Amber Alert, when issued, is not to be rescinded by any state until the child(ren) is found and returned home.


That’s all you need, that, and the ability to state your case to those you ask to sign which can’t be difficult.

Those of you in Canada, can change the wording where appropriate to get the point across.

I am not sure what the laws are regarding other countries around the globe, but those of you in other parts of the world, if you see the need for this, then apply it as you see fit.

No parent should have to bare witness to the humiliation of their child at the hands of a complete stranger, yet alone one the child may know.

No parent should have to bury their own child.

It’s time to stop this insanity

Employee or Independent Contractor?

Do you know the difference?
Both can work from home
The employee is told by the company what hours they are to work and what days they can take off. They are usually only allowed to work a certain number of hours which are determined by the company. In most cases you are prohibited from working at home for another similar type company and must sign what is known as a "non-compete" contract. The employer withholds both their share of FICA and Income Taxes from your check and at the end of the year gives you a W-4 form.

As an Independent Contractor, you are the one who determines when you wish to work and how many hours you wish to work. Now don't get me wrong, the company or companies you work for do have the right to evaluate your work not only for quality but also for quantity of time put into working for them. Some companies adhere to the requirement that you work a given number of hours for them every week or every month and you can be terminated for non performance or poor quality of work. You can decide how many hours you wish to work in a day or a week. Perhaps you wish to work just a couple hours a day on some days but work 8-10 hrs on another and as an independent contractor you can do that. You also can work over 40 hours in a given week if you so desire. There might be times when incentive pay is offered if you work during certain hours but you do not get over-time pay as an independent contractor. As an independent contractor, you will be given a 1099 form by the companies that you have provided services for. It is your responsibility to pay all (they don't pick up part of the tab) of your FICA and income taxes for both state and federal taxes.  Since you are self-employed, a good rule of thumb is to consider 28-33% of what you make will need to be held out to pay your taxes. You may decide that paying your taxes on a quarterly basis is better for you to do than to wait until the end of the year and have to come up with all the money all at one time.

By working at home, either as an employee or as an independent contractor, you are the one who is responsible for the purchase and upkeep of your computer equipment, maintaining the security of documents both in your home office and on your computer. You are required to have what is called a "designated landline phone" which means you must have a phone line totally separate from your personal home phone line and number.

Some companies that you work for as an independent contractor, will also require that you incorporate your business. 

Presently some states are passing legislation which makes it either very difficult or impossible to work from home as an independent contractor. Please check with your state laws to be sure that you are eligible to work as an independent contractor.

In prior articles I have given you some websites to check out. Don't just check them out the one time and forget about them. Many of them may not have had an opening the first time you checked but they may have some now.  There are places like rat race rebellion which will continually have new listings.

Sunday, January 10, 2010

Finding Your Inner Talents

In past articles, I have discussed working at home for other companies either as an Independent Contractor or as an employee. Of course as an Independent Contractor you are self employed and you are able to set your own work schedule, controlling the number of hours you wish to work and what time of the day or night you wish to work.

Now let’s take inventory of your skills and see how they can be turned into positions where you can work at home but starting your very own in home business. I am going to tell you about some people who have successfully started their very own businesses and I want you to mentally go through your own skills and see how they could relate to some of these people.

Sally worked for a local doctor’s office where she did all of the insurance claim work. She not only did the transcriptions of the medical files but she also handled the medical coding of all the paperwork that was submitted to various insurance companies in order to get paid for the company’s service to their patients.  Sally loved her job; she worked Monday through Thursday from 9am to 4pm with an hour for lunch. On Fridays they only worked from 9am until Noon.  Then Sally learned that she was pregnant and was concerned about working after the baby was born. The doctor that she worked for gave her a wonderful suggestion. Why not set up her own business at home doing medical transcriptions and medical coding for a group of doctors there in the building where she now works. She thought many of the other doctors would be receptive to the idea because they would not have to put her on their payroll as an employee, she would be an independent contractor. Sally followed up on this suggestion by making phone calls to some of the doctors to get their opinions on this idea. She didn’t actually ask them if they would hire her to do their work, all she did was ask for their opinions. They were extremely interested and gave her some great suggestions. By the end of the conversations she had many of them telling her to contact them when she was ready to start her business.

Sally ended up working for her doctor from home the last couple months of her pregnancy reducing her schedule to part time but enough so that she still had her insurance coverage for the delivery of her baby.  On weekends Sally designed her brochures and price list to give to her potential clients. She made her contact list of doctors and drafted the cover letter she would use to introduce her new business. When her baby was 6 weeks old, Sally launched her business. She started out with just a few offices to work for which was fine, it allowed her to have time to spend with her new son as well as brought in income for the family. As her son grew, so did her business and she is no longer able to accept any new clients at this time.

Ed was a Navy man, having worked aboard a submarine tender for over 10 years repairing submarines.  He was also a family man and loved to tinker around the house building and repairing things. But now he was retired and what was he going to do with his time?  After several years of working as a consultant to many large companies, he decided he wanted something a little less stressful where he could utilize his skills in doing home repairs and maintenance so he started his own business where his company would go into homes or apartments after the tenants moved out and would do all the repairs and repainting work. Then the recession hit and business tapered off and he wasn’t sure what he was going to do. You have heard the expression of taking a sow’s ear and making a silk purse out of it?  That is what he did.  He contacted the different banks and mortgage companies that had repossessed homes and offered his company’s services to restore them so they could be put on the market and resold.

Fred was a free-spirit, a loner with an entrepreneurial spirit. He didn’t like working for someone else and was very inventive about finding ways to be self employed. At one time he drove a delivery truck for a company that delivered supplies to the Indian reservation in Flagstaff, Arizona. He loved that job it gave him lots of freedom, he worked alone basically, doing his route in the truck. Then his son was injured in a terrible automobile accident. He wanted and needed more flexibility and that is when he decided to become a taxi driver with his own cab, subcontracting with a company there in Flagstaff.  He could set his own work schedule so that he could be off when his son needed him.

David and Jennifer were terrific cooks. David had worked for some VIP’s in Texas as their personal Chef as well as working for several Country Clubs. Jennifer didn’t have professional experience as a cook; she was just darn good at it, specializing in French cooking and elegant deserts.  They purchased an established restaurant that was for sale in a small tourist town in Arkansas. They redid the interior themselves since both of them have that wonderful interior decorating talent. They established a new menu and business flourished. They had the business for several years when an offer was made to purchase it that they couldn’t refuse!  They sold the restaurant and returned to Texas to be near family.

Mary runs a licensed in-home day care business. She originally worked for a bank until she married and had her first child. They had decided that once they started their family that she would work from home so that she could spend time with their children. Mary did her day care up until after her 2nd child reached school age. At that time she became an independent contractor working at home for several companies doing customer service work. After several years, she became pregnant again so she temporarily shelved her independent contractor positions and has returned to operating her day care business. She has enrolled in online college classes that began this January and is now working towards her degree in Elementary Education. She figures that she can work in the classroom or as an online tutor over the Internet.

Anne has two children in school and two at home who are still in diapers! She wants to bring in extra money to help the family budget but her time to work is limited. To relax she loves to sew, making baby accessory items and personalized baby gifts which are monogrammed bibs and blankets. So why not take that talent and turn it into an on-line internet business? There is a website called which specializes in letting you set up a “store” on their website very reasonable and the nice thing is that your products must be handmade. Right now many people want to purchase items that are handmade or handcrafted. She is now in the planning stages of starting her own on line shop.

As a youngster Scott learned to be a magician. He had mastered the art of sawing people in half, pulling rabbits out of hats, doing levitation tricks and the ability to perform these tricks at parties and get paid to do so.  He had a gift of gab and was a wonderful entertainer.   I knew him when he was only 15 and he was able to put on a wonderful magic show at that age.  I’ve often wondered what he ended up doing when he grew up.
If you are out there and reading this Scott McKeon from Grand Rapids, Michigan, give me a shout!

What I have tried to show you here are ordinary people who have taken their personal God given talents and used them to make a living for themselves. Now not all of them are millionaires for sure, but they are doing what makes them happy and gives them the feeling of fulfillment. You can do this too!

I go to the craft shows where I am in awe of all the wonderful products for sale. Everything from handcrafted soaps, homemade honey, candles, household goods, interior decorations for your home, to homemade quilts and hand knit or crocheted items.

I am constantly answering my door to people who have started their own businesses from tree trimming to lawn mowing or as an independent carrier for the local newspapers. Now tell me why one of those lawn mowing people didn't buy a shovel or two and do snow removal this past couple of weeks?

We have one local grocery store here who has a terrific service. You can contact them by phone or the internet and give them your grocery order. One of their employees will do your shopping for you. Once completed, they call you and give you the total to which a delivery fee or pickup fee is added.  You pay for it by charge card or debit card. You can come into the store and your order will be waiting for you, or if you paid for delivery,  your groceries will be delivered right to your front door. I personally see how this could be turned into your own home business. 

Are the wheels spinning yet?  I hope so!

Sunday, January 3, 2010

Show Someone with Cancer that you Care!

This is so important that I am going to post this on both of my blogs.

Cleaning for a Reason

 If you know any woman currently undergoing Chemo, please pass the word to her that there is a cleaning service that provides FREE housecleaning - 1 time per month for 4 months while she is in treatment.

 All she has to do is sign up and have her doctor fax a note confirming the treatment. Cleaning for a Reason will have a participating maid service in her zip code area arrange for the service.

Cleaning for a reason is the name of the website

 Please pass this information on to bless a woman going through Breast Cancer or any kind of cancer.
 treatment. This organization serves the entire USA and currently has 547 partners to help these women. It's our job to pass the word and let them know that there are people out there that care. Be a blessing to someone and pass this information along.