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| Starting a business from home (a small business from home) is a great oportunity. Before You start a working from home business read this report, how to start a business from home.
Starting and Managing a Business From Your HomeTax Obligations And BenefitsSignificant tax savings are available to the home-based businessowner in the form of deductions, credits, and depreciation allowances. The time, money, and energy you put into keeping good records and keeping current on tax laws will be worthwhile and ensure that you operate within the law. You will need to plan for income tax, social security (all self-employed persons must pay a federal self-employment tax), employees' taxes (if you hire anyone), property tax on your home and business-related taxes, such as sales tax, gross-receipts or inventory tax (in some states and localities), and excise or individual item taxes (on certain commodities).The Internal Revenue Service supplies the following free booklets (and runs free workshops) to give you details on your specific obligations: Your Federal Income Tax (Publication 17) Tax Guide for Small Business (Publication 334) Business Use of Your Home (Publication 587) Employer's Tax Guide (Circular E) Self-Employment Tax (Publication 533) Tax Information on Retirement Plans for the Self-Employed (Publication 560) Tax Information on Depreciation (Publication 534) Information on Excise Taxes (Publication 510) Tax Withholding and Estimated Tax (Publication 505) There are various federal and state forms you will need to fill out to start a small business. The federal government requires you to fill out several forms including the following: Application for Employer Identification Number (Form SS-4) (If you have employees or are subject to excise tax) Employer's Annual Unemployment Tax Return (Form 940) Employer's Quarterly Federal Tax Return (Form 941) Employee's Withholding Allowance Certificate (W-4) Employer's Wage and Tax Statement (W-2) Reconciliation/Transmittal of Income and Tax Statements (W-3) As a home-based business owner you should be aware that every business decision--each purchase and transaction you make--has tax implications or built-in tax advantages or disadvantages. Deductions may be available for home maintenance and improvements; automobile expenses; telephone expenses; office and work space; inventory space; major purchases, such as a computer; and a wide variety of other items such as uniforms, coffee service, trademarks, a safe deposit box, credit bureau fees, and business cards. Each business situation is different and tax laws change, so consult up-to-date references, a trusted attorney, and an accountant who can advise you on your particular obligations and benefits.
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