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Starting a REAL Home Business - The Series - #1

by Jean Murray on November 3rd, 2008

Are you getting paid for work, but not as a “real”business?  If so, you are missing out on some tax advantages and other benefits of having a business.  Over the next few weeks, I will give you some tips on how to set up a home business.  Today, I

My daughter-in-law is one of those “mile a minute” types.  She has two school-age children (kindergarten and 2nd grade), an active social life through her church, and a part-time job as a receptionist.  And she still has time to do catering, for the church and for the occasional party.  The other day, in one of those “AH HA!” moments, I realized she should set up a home business.  Here is why:

  • She can set up as a sole proprietor with little paperwork, but she might do better setting up as a limited liability company (LLC), to make her business look more real (I’ll explain more about this later).
  • Then she can deduct all her business expenses (mileage, accounting software, etc.) rather than just paying them and not getting credit.
  • If she hires someone to help her, she can also deduct those payments from her taxes.
  • If you make a profit in your home business, you can offset any income from your other work, to reduce your taxes.

It’s really not complicated to set up as a home business.  The trick is to do everything like a real business, so the IRS doesn’t disallow all your deductions as a “hobby.”

Tomorrow, how to get that home business set up easily and correctly.

Tags: , home business opportunity, ,

POSTED IN: Business Ideas, Home Business Opportunities, Taxes

1 opinion for Starting a REAL Home Business - The Series - #1

  • Quilting Biz - Check Out Jean Murray’s Advice
    Nov 9, 2008 at 12:35 am

    [...] Biz Notes, where I wrote for two years, has begun a series I think you’ll find of interest.  Starting a REAL Home Business will be a great resource for [...]

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