So you’ve taken the leap and started your own home based business.  You’re thrilled to be working for yourself, but now you’re feeling the burden of paying for your own insurance, paying double on social security, and minding your tax responsibilities.  The good news is that you have a new world of tax deductions available because you’re working from home!  Here are few to look for—start keeping records right away!

• Home office.  That’s right—you can deduct the portion of your house that you do your work in.  However, be aware that there are some tight restrictions surrounding this one.  The most notable is that this space must be solely used for your business.  The corner of your bedroom where you’re keeping the computer doesn’t count.  Once you’re down to the right specifications, you can deduct everything that goes into maintaining that space: mortgage or rent, insurance, electricity, etc.
• Office supplies and furniture. What good is a home office without a chair, desk, filing cabinet, paper, pens, and post-it notes?  Yes, this is all deductible.  It’s necessary to keep your business running!
• Phone and internet service.  If you’re able to show proof that you’re making business-related phone calls and doing business-related internet searches/emails, etc., this can be written off, too.  The key?  You may need to get a separate phone line.  And unless you’re advertising your business on Facebook, try to keep away during your “business hours.”
• Mileage.  Does your home based business require some travel?  Make sure to keep strict logs of your mileage and toll fees, as well as your destinations and the reasons for going there.  If you’re as diligent as the government requires, this can be an easy write-off.
• Travel, meals, and entertainment. If you’re traveling far for your business, you can deduct any of these expenses–your hotel, your lunches and dinners with clients, etc.  You might not have a direct boss to reimburse you when you return, but the IRS will allow you to write it off come tax season!
• Health insurance. We all know this one can be outrageously expensive when you’re paying for it with no help from an employer, but actually, this can be deducted as well for a little relief.
• Advertising/Promotions. Any expenses toward building your business may be eligible for deduction.  Did you give away some of your product for free to encourage sales?  Place an ad in the newspaper or create a tv commercial?  This may all qualify.

Of course, all of these are subject to all of the rules and restrictions set by the IRS, particularly the home office deduction.  Therefore, please be sure to check with an accountant or another qualified legal expert to make sure that you qualify and/or are keeping accurate enough records.  And don’t hesitate to ask or look for more deductions—there’s always something else hiding out there!

The Cash for Clunkers program created a lot of buzz during its time.  The government drummed up $1 billion to be used by consumers toward the purchase of a new, more fuel-efficient car.  Each consumer could be given up to $4500 towards that new car, and the credits were snatched up so quickly that not only did the government rush to approve another $2 billion, but the program ended months before its proposed expiration date.  Sounds like a success, but did it really work the way it was meant to?

According to the Forbes website, car sales in August were up 26.5% from July, and there were a reported 700,000 new car deals made across the country in direct response to Cash for Clunkers.  While those numbers are impressive, we should look a little deeper.  Will the effects be lasting?  What were the other consequences?

The Shredding of the Clunkers

Encouraging people to drive more fuel-efficient cars is an excellent idea.  Getting them out of their so-called gas-guzzlers will save them money in the long run and have a positive effect on the environment.  However, there has been a lot of debate surrounding the way the cars that were turned in for the program were taken off of the road: they were required to be shredded.  No donation to charities or countries in need, no spare parts or scrap metal saved—the whole thing had to be shredded.

True—this does ensure that the turned-in cars remain off of the road.  But the program turned away cars made prior to 1989, which eliminated many of the cars that are true gas-guzzlers.  And while there were different requirements for different types of cars to qualify (i.e., sedans vs. pick-up trucks), many people could qualify just by getting a new car that got only 2 miles per gallon better than their current one.  This leads to perfectly good cars with at least decent gas mileage being completely destroyed.

Who Really Used Cash for Clunkers?

Used cars did not qualify for this program; you had to buy new.  That’s not necessarily bad by itself—who doesn’t love that new car smell?  But new cars are always more expensive than used cars.  Even with the $4500 tax credit, this leaves out the people with limited funds who may truly have been in need of a better car, new or not.

It has been argued that the people who took advantage of Cash for Clunkers were the ones that were already in the market for a new car, the same people that already had enough money and a good credit score.  The only real difference could be that it may have enabled them to make their purchase sooner than they were anticipating.  So in this case, purchases that would have been made during the remainder of the year were simply crammed into the month of August due to a limited-time offer.

The overall idea was definitely a positive one, fueled by good intentions.  Yes, it did spark sales, but the numbers are still not in the range they used to be in past years before the recession.  With Cash for Clunkers over (and many dealerships still waiting to be reimbursed from the government…), it most likely will not create any long-term effects in the way of auto sales, and people who really needed a new car in exchange for their 1988 model are still waiting for their stimulus offer.

Slump.  Recession.  Downturn.  These seem to be the only words we’ve been hearing for the past few years when talking about the real estate market.  Are you as tired of hearing them as I am?  Good.  It’s time to look at the bright side and discuss some indicators that the real estate market is recovering.  It won’t happen by tomorrow, but we could soon be talking about an upswing.

• Home prices are not declining as quickly.  In recent months, they’ve either remained steady, gone up a little, or seen only a slight drop as opposed to the common major falls of the past.  This is a good sign that consumers are purchasing homes again, rolling money back into the market.
• At the same time, home prices have not witnessed a huge increase.  This side is even better for the consumer; it has become easier for many people to afford homes.  While rising unemployment rates threaten the affordability from the other side (and keep the possibility of foreclosures near), the fact that prices have remained relatively steady offer a positive promise for the real estate future.
• With prices low, the people that can afford to buy homes are actually buying them.  One big help has been the first-time homebuyer tax credit.  People that are buying their first home can receive up to an $8000 tax credit that does not have to be repaid.  If you are in the market for a new home (excuse the pun), do not forget to take advantage of this!  It’s only available through December 1, 2009.
• Even though credit requirements have become stricter due to the high number of recent foreclosures, interest rates have remained low.  This equates to more affordable loans for new homebuyers, as well as a great opportunity for many people to refinance their current homes.
• Foreclosures are still common.  This may seem like an oxymoron; yes, foreclosures are a negative occurrence for all involved parties.  However, foreclosures mean even lower home prices, opening up the possibility of homeownership for even more people.  These properties account for about 1/3 of home sales.  Without the low prices that come with them, home sales would not be rising.  Of course, low foreclosures would be a better sign of recovery, but for now, the fact that it equals a low price and a home sale stands to push the market in the right overall direction.

These indicators may be only small glimmers of hope that the recession will end, but a positive outlook is always beneficial.  If these signs can become a solid base to build upon, perhaps we can eliminate the words “slump” and “downturn” from our vocabulary.