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Tax Tips for the Home-based Business Owner


Guest post by: Jill Hart
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Tax season is one of the most nerve-wracking times of the year. From putting together all of the necessary tax documents to finding the right accountant, taxes can be time-consuming, frustrating, and a major challenge. Add in a home-based business and taxes can be downright overwhelming. However, there are some things you can do to make your tax season a breeze.

Choose your accountant wisely
One of the most important decisions you’ll make as a business owner is who you will choose to help you with your bookkeeping and accounting needs. Research accountants in your area and look for one that specializes in small business taxes. Ask if they will prepare both corporate and personal returns if needed. Make sure your accountant is clear on how they charge for their time – especially for questions over the phone.

I once worked with accountants who worked with large corporations. They were used to having very little contact with their clients, however with a new corporation I had many questions about how things worked. Needless to say it didn’t go well. Our current accountant specializes in small businesses and is available by phone or email if I have a question.

Set up your business accounts properly
I was told early in my business career that I must make sure to keep my business accounts and personal accounts separate. When I first began running my own business I simply added a second checking account to use for business purposes. There was no cost to do so I was able to set my income aside in this separate account.

I also set up a savings account to set aside my taxes each month. This was a big help at the end of the year knowing that all of my taxes were set aside and I could relax instead of scrambling to come up with the money.

Keep good records
Another way to keep tax season stress-free is to keep business receipts throughout the year. I keep a separate file in the filing cabinet next to my desk just for this purpose. This way I have everything in one place when tax season arrives. If you don't have room for a filing cabinet, consider an expandable folder categorized A – Z. That way you can still divide up the taxes by topic, and won't have to do that come tax season.

Keep records of your business expenses throughout the year. Request a list of items from your accountant or tax professional, so that you will know what items to track. Be sure to ask what counts as “business expenses.” There are certain deductions that you can take for your home, car, and utilities. Consult your tax professional about these deductions.

Know Your Tax Facts
It's important to know the date that your taxes are due. Many S corporations are surprised when they discover that some of their tax forms need to be filed by March 15th and not April 15th. Another surprise to some home-based businesses is that if you pay subcontractors over $600.00 a year, you need to send them a 1099 by the end of January.

There are many places online to find more information about taxes. One great place to find more information is the Internal Revenue Service (IRS) website at www.irs.gov. They have sections with helpful information on both personal and business taxes. They also list contact information for local IRS offices where you can also find help.

Don’t ignore the taxes involved with running a home-based business and hope it will all work itself out. It takes planning and effort to be prepared for tax season. Do your homework when it comes to taxes and find an accountant that you trust to guide you through the tax maze. With the right preparation and help your tax season can be stress-free.


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Work From Home Tips - Top 10 Ways to Get Traffic to Your Blog/Website - By Jill Hart

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About the Author: Jill Hart

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Author Bio: Jill Hart is the founder and president of Christian Work at Home Moms, CWAHM.com and brother site for dads, CWAHD.com,, and the co-author of “So You Want To Be a Work-At-Home Mom.” She graduated from Grace University with a Bachelor’s Degree in Human Development/Family Studies and Bible. Jill has worked from home since 2000 and started her own home-based business to assist other Christians who desire to work from home while maintaining a godly life. Jill’s articles have been featured on websites like DrLaura.com, ClubMom.com, and she is an expert author on EzineArticles.com. She is also a contributing author in four books. Jill is the host of the podcast, Christian Work at Home Moment and co-host of the LIVE internet radio show.
Click here to visit Jill's website.
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