Starting a REAL Home Business - The Series - #1
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: business taxes, home business opportunity, home-+-business-+-ideas, home-business