Taxes and The Home Based Business

By Brian Rooney



When you start your own home based business, your tax situation changes dramatically.

Did you know that a home based business allows you to possibly deduct portions of your mortage or rent payments?

Other possible deductions may include portions of your utilities, your phone bills, remodeling costs associated with furnishing or preparing your new home based business office, etc...

You should definitely consult your own tax professional for the laws and regulations in your area.

Many new home based business owners either completely overlook or get overwhelmed with the tax laws and regulations that govern their new venture. Luckily there are places you can go for answers to your home-based-business tax questions. We have listed some of them below:

State taxes

Laws regarding tax deductions, income tax, and sales tax vary dramatically from state to state. Contact your state's tax office for specific information about how taxes are calculated and collected in your state.

Federal taxes

Next, you will need to learn about the federal tax laws that govern your business. Here are some resources for federal tax information:

• The Internal Revenue Service. The IRS is, of course, the definitive place for information on federal tax issues. The IRS Web site provides comprehensive information for small businesses and also lists a toll-free number should you need more help. Spend some time at the IRS Web site until you feel comfortable with the new tax laws you will be facing.
• The Small Business Association. The Small Business Association site provides a wealth of information for small business owners. In addition to information on tax laws, you can find information on many topics that are of concern to small business owners.
• Nolo Press. Among their myriad legal resources, Nolo Press sells books, e-books, and guides specifically about small business tax issues. Their excellent Web site also offers free information, including a Small Business Taxes FAQ.
• The Social Security Administration. If you plan on hiring employees, you will need to be well versed in employment tax and other issues that face business owners that employ non-family members. You will need to know about withholding tax, state tax, and many other tax laws before hiring any new employees. This site is a great place to learn more about employer tax laws.

Taking the time to educate yourself about taxes now can help you avoid tax problems in the future. If you still have tax questions, contact an accountant or an attorney that is certified in handling tax issues for businesses. A professional will be able to help you understand the many tax laws that commonly baffle new business owners.

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Brian Rooney is the founder and a Managing Member of TrafficWave.net LLC. TrafficWave.net LLC provides tools, training, and resources for small and home based businesses throughout the world. Visit TrafficWave.net LLC online at http://www.trafficwave.net.

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