Note from the Editor

This will be the last edition for the year. I anticipate returning to this newsletter around January 9, 2008. That’s about three weeks. I know I won’t be wanting to do one the day after Christmas, and I won’t promise to be back on a regular schedule by January 2. Might be, but I won’t promise it.

Much of the break will simply be due to being tired from all the family events this time of year. It’s a good time for me to take a break and just enjoy the fact that I can take a break.

Year End Tax Tips for Home Businesses

Someone recently asked me what they could do now to make tax time easier for this upcoming tax season.

The best thing you can do is to think about taxes before then year ends. Most people wait until the tax filing deadline before they ask how they can reduce their income taxes. Unfortunately, once 2007 ends, there’s very little you can do to minimize your taxes for 2007.

To start your tax planning, you should review your income, deductions and withholdings before the year ends. Which means you need to get your bookkeeping caught up! You should use a software program, such as QuickBooks, Quicken Home and Business, or spreadsheets to keep track of your income and expenses for your business.

Once your bookkeeping is caught up… do you expect your home business to have a profit or a loss this year?

If you have a profit, here are some tax planning tips to help minimize your home business taxes this year:

1. Defer your income. If you have a home based business and it looks like you’ll have a good profit this year, consider invoicing your clients in January instead of December, to defer the income to next year. Or, just wait until the end of December to send invoices. Any money you receive in January will go on your 2008 tax return, not 2007.

2. Accelerate expenses. Do you need to purchase any inventory? What about supplies? Does your computer need to be replaced? If you’ve got a profit for 2007, consider purchasing inventory, supplies or other items that will need to be replaced soon this year to reduce your taxable profit.

In addition, if you itemize your tax deductions, make sure you pay all mortgage payments, property tax, medical expenses, etc. this year, even if they aren’t due til next year, to help increase your tax deductions for this year.

3. Contribute the maximum amount to retirement plans. As a home based business owner, you have several retirement plans to choose from. You can setup a traditional IRA, a SEP IRA, a Simple IRA, or even a 401K. The maximum contribution amounts vary based on the retirement plan, but these plans allow contributions from $4,000 up to $44,000 per year. Contributing to a retirement plan is a great way to maximize your retirement savings and to minimize your taxes at the same time.

4. Give to charity. Although charitable donations don’t reduce your business income, they do reduce your taxable income if you itemize your deductions. Gifts of cash or goods are a great way to help reduce your tax bill this year.

On the flip side, if you expect a larger profit next year, or if you expect to jump into a higher tax bracket next year, it’s best to report as much income this year, and to defer as many expenses as possible til next year.

Either way, year end tax planning can really help minimize your taxes. But you have to make it a point to review your taxes before the year ends. Once 2007 is gone, so are your tax planning opportunities for 2007.

Kristine A. McKinley, CPA, and CFP®, offers financial and tax planning on an hourly, fee-only basis. She specializes in helping home based and online business owners understand and minimize their income taxes.

For more tax tips for home based and online businesses, please visit http://www.onlinebiztaxtips.com

Note from the Editor

The holidays are coming! The holidays are coming!

Just in case you weren’t aware of that fact.

Like many marketers, I hope to have a highly successful holiday season. It’s a time to gear up marketing efforts (well, several weeks ago would have been better yet), update pages that aren’t quite current, and to think about ways to relate your business to the holidays if it’s not obvious.

In other words, we should all be very busy right now. That’s why I’ve been cutting back on random reading and trying to get more focused for a while now. It’s hard to do with family events already starting, but it’s important too.

And never forget the part about having fun. That matters too.

Do You Recognize These 5 Common Misconceptions About the Public Domain?

You’ve probably heard that creative works in the public domain are free for the taking, to repackage and sell as your own. Sounds great, right? But are you sure you know what “in the public domain” means? If you intend to republish public domain content, make sure that’s what it really is.

Here are 5 mistaken beliefs people have about the public domain. How many do you believe?

1. Anything I find on the Internet is in the public domain.

Not true. There are public domain works on the Internet, but the reason those works are in the public domain has nothing to do with the fact that they’re available online. In the context of copyright law the term “public domain” has a specific legal meaning. It means a work is not protected by copyright. Most everything you’ll find on the Internet is protected by copyright. Don’t confuse “available to the public” with “in the public domain.”

2. If a work doesn’t have a copyright notice on it, it’s in the public domain.

Not necessarily. Before March 1, 1989, copyright notices were required on all published works. On that date they became optional, so works published within the last 18 years don’t need a copyright notice to be protected. In addition, if a work was published without a copyright notice between January 1, 1978, and March 1, 1989, it did not go into the public domain if the owner took certain steps to correct the mistake.

3. Books that are out of print are in the public domain.

Don’t confuse “out of print” with “out of copyright.” When a book goes out of print its copyright does not automatically expire. Copyright protection lasts for a specific term of years whether or not the work is in print and being sold. Even though most books go out of print within one year, copyright now lasts for the life of the author plus 70 years.

4. All US government works are in the public domain.

No, not all. Works created by US government employees as part of their official duties are in the public domain. But don’t assume that all US government works are copyright free. If the government hires an independent contractor to create a work for it, that independent contractor may retain copyright. In addition, some government organizations can claim copyright in their works — and they do. Two examples are the Smithsonian Institution and the US Postal Service.

5. If I republish or repackage a public domain work, I can claim copyright in it.

When you add your own material to a public domain work, only the material you add may be protected by copyright. The underlying work remains in the public domain. Once a work is in the public domain no one may claim copyright in it. Let’s say you made a DVD collection of US Army footage from World War II. Your selection and arrangement of that footage (plus things like your narration or choice of music) would be copyrightable — but the original footage you used would not be. Anyone else would be free to use it, just as you did.

Don’t rely only on what you’ve heard “in the public domain” means. If you do, you could end up in legal hot water.

Barbara Andrade is the founder of http://www.publicdomainsherpa.com which provides free information and resources that help you find and use public domain content.

To learn more mistaken beliefs about the public domain, follow this link: Misconceptions About the Public Domain

Note from the Editor

One of the interesting things about online business has to do with the ups and downs. I’ve been through both, and the really low downs are no fun at all. But the highs, even small ones, are an absolute blast.

Right now I’m at more of a midpoint, but a bit on the low side. Not the best I’ve ever done (by far), but far from my worst. But also where I would really like to be doing better.

Obviously, trying to do better involves a lot of work. Longer hours. Trying to get things back up to a good level as the rules change bit by bit, as does the competition.

Good thing I enjoy this stuff.

Are You Faking It Or Are You Making It?

Have you heard the phrase fake it until you make it? It’s something which is increasingly common among business owners, especially on the internet or in direct mail. The basic idea is someone sells you a program or course teaching you how they made millions- only they haven’t yet made the millions, they hope to do so by selling thousands of copies of the course they sold you. They were lying about being rich to begin with, but if all goes to plan they’ll get rich in the end. Odd huh? These tactics are on the rise, so we’re going to try and explode some of the myths in this area.

What’s The Point?
What is the point of this kind of business? After all would you take flying lessons from someone who couldn’t fly a plane? In one word, the point is laziness! The “fake it until you make it” guys are typically internet or direct marketers who are possibly new to the whole thing, or just the more experienced kind that are plain lazy. They find a web page or direct mail ad that is very convincing, promising millions of dollars just by following these few simple steps, working just a few hours each day from home. Is there anyone that wouldn’t want that lifestyle?

So they part with their money, and are sent a course explaining how to set up a very similar website, selling an almost identical product. They will make money if they can make some sales from this site, the end result hopefully being that they make enough money to take care of the “make it” part. And then the cycle repeats and repeats, until there are thousands of people selling products, making a few hundred dollars, but claiming to make millions from it on their web pages. A truly strange phenomena, but somewhat of a self fulfilling prophecy.

The Legal Standpoint

Is it legal for advertisers to work on a “fake it until you make it” basis? I don’t know what the FTA would make of it, but I would guess it’s some kind of grey area, as it’s very difficult to prove how much anyone is or isn’t earning from their website. Most often they will provide screenshots of proof of earnings etc on the sites that they sell their courses from. They can look pretty convincing, but these days it’s pretty easy to swipe such images from another site, or just create them yourself with Photoshop or some similar program.

Do Any Of Them Make it?

Very few if any. You can make millions from the internet and other direct marketing methods, but it takes consistent effort and skills that are built up over time. If the “fake it until you make it” guys are too lazy to find their own manner of working and too dishonest to be bothered about telling lies, the chances are most of them are not going to apply the consistent efforts required to learn the ropes or make any money at all. Those new to internet marketing are pretty susceptible to these schemes, and many people do start there before getting their own (better) ideas and becoming successful doing something else.

Is It On The Increase?

Yes, unfortunately so. Modern web technology makes it possible for complete amateurs to create or acquire tremendously impressive websites, sites which can really snare and captivate a viewer. The casual web browser has no way of knowing how old the site is or if the proof of incomes are real or fake or even just stolen from another site. The only remedy is to be extra vigilant.

How To Tell?

It’s very tough to tell if any person is being honest about the claims of their product. Thankfully there are a few tricks we can keep up our sleeve. Visit whois.net – This site will give you details of any website, the name of the owner, when it was first registered etc etc. Very useful, as it’s unlikely that a website registered 6 weeks ago is making millions for its owner! Visit Alexa.com – This site keeps traffic stats for virtually every page on the web. A profitable webpage will usually have hundreds or thousands of daily visitors, especially if the site is making the owner millions. It’s very easy to see if this is true by using the graphs here. Google the site owner’s name. You can find out many useful things with a simple Google search, and if there are bad reports or reports of the site being a scam, you can usually find them with some smart searching.

Look for a guarantee – Many online payment processors, Clickbank.com for example, will have a guarantee, so that if you aren’t happy with your purchase you can get an instant refund.

Hopefully you’ve found this useful – Remember-If you avoid “faking it” you’ll have a better chance of “making it!”

Dave Origano runs seven successful business, all doing at least 6 figures per year. Learn from this successful serial-entrepreneur how he does it, what marketing secrets he has and what strategies he uses at his website www.MrOrigano.com