Home Based Business

Do you know the rules and laws regarding taxes for a home based business? For entrepreneurs already operating a home based business and for those just starting, taxes, knowing local zoning laws and IRS rules are very important. In terms of record keeping and accounting, a home based business on the Internet is the same as regular business offline. Many individuals either ignore this or they simply don?t know, but they will pay dearly when the IRS catches up with them. In case you have forgotten, here is a reminder: ?you cannot escape death and taxes?. So make sure you understand IRS laws and rules, and keep records of everything regarding your business. Some cities require that you register your business with the city or county; file a DBA (doing business as) in your name. You will be then subject to state and federal taxes and I strongly advise you to know and abide by the rules and laws to avoid problems down the road. Also, you will be subject to an audit of your business by the IRS.

Generally, taxation for a home-based business on the Internet is more complicated and puts you under IRS scrutiny more so than others. You will be challenged on just about everything you claim as business deductions, so keep accurate records of sales, purchases needed to operate your business. As a business owner you?re allowed to deduct business-related expenses such as advertising, the cost of office supplies and equipment, insurance premiums, transportation expenses and mortgage or rental payments from your income taxes, and may also be required to pay self-employment taxes.

It is strongly suggested that you familiarize yourself with IRS Publication 587 that explains the use of your home for business, to ensure you are following all the federal regulations completely. The same applies for State and local government. This publication will serve as your bible in terms of operating a home based business.

Once you get a clear understanding of the issue of taxes, you can move forward with your home based business and eliminate problems with the IRS.

You should be aware that the Internal Revenue Service (IRS) tends to audit home based businesses more often; especially when writing off many different expenses, including the percentage of the mortgage or rent for your home office space. Yes, you are definitely under the IRS microscope when operating a home based business.

Its Good Business on the Internet

Jed Tooke

510-764-1364

Skype: genesischild