September 22, 2017

Taxes and Paid Work From Home

Doing paid work at home is considered being self employed and unlike working an outside job, you are responsible for paying all of your taxes. The good news is that there are many things that can be deducted lowering the amount you may owe if any, such as a home office. The idea of taxes can cause apprehension at first but it is not as difficult as it may seem especially with the different tax preparing software that is out there.

There are possibly three different taxes that you may have to pay which include city, state, and federal taxes. The tax for your city may be in the form of a business license to allow you to legally work either as a business or even an independent contractor. State tax may be yearly or quarterly through out the year and federal is normally reported annually. All of this depends upon your location and different zoning laws and such and should be researched prior to working as to avoid any possible fees.

Deductions come in all different forms from the office itself to any supplies and equipment that are necessary for the business operation. There are tax breaks for the use of vehicles, including gas, and communications separating the usage amounts for personal and business. This is usually good news for hobbyists that have large amounts of supplies they rely on to create products with as they will be a major part of their taxes.

People tend to become reluctant when it come to doing paid work at home because of the complexity of taxes but having a professional or software tax preparation can help elevate the stress of it. The taxes for an individual or even small business is not nearly as involved as they would be with a larger company and most people are able to do it themselves so in reality there is more over reaction than necessary.