Tax Returns are as important for your home based business as they are for any other business, or if you are working in a job as an employee.
It is important to remember that a Home Based Business is as legitimate as any other business, and that you need to ensure you are legally tax compliant.
This will also brings some benefits that you are able to use to your advantage.
Those benefits will vary depending on a number of factors.
The biggest considerations are usually:
IMPORTANT NOTE: these are not the only factors taken into consideration when working our your tax requirements so it is always a good idea to get the correct advice.
Getting the right tax advice right from the start could save you a lot of work as well as a lot of heart ache.
The Government Tax Department of any country has significant powers to investigate potential tax breaches to ensure we all pay the correct amount of tax.
In my opinion it is just not worth getting it wrong. You will tie up a lot of time and resources that would be better spent building your business and increasing your income.
So finding the right tax information is essential.
There are a number of options for getting advice.
1. You can go directly to your Government Tax Department - whichever one is relevant to your location.
2. You can seek out a Tax Consultant - again one relevant to your location, but it is also beneficial to find one that has some experience dealing with your type of business enterprise.
3. You can use an Accountant - and again it is beneficial to find one with experience with your type of business. The type of Accountant you use is also a factor. For example, in New Zealand they may or may not be a Chartered Accountant - and this is based on their qualifications as well as membership of a professional accounting organization.
Who completes your tax forms will depend on a few things.
While your Home Business is a legitimate business activity, it is still not exactly the same as many other businesses.
In New Zealand there are tax advantages to using your home as your business space. This is also probably true of many other countries and their tax systems.
You may be able to claim a % of your home expenses such as rent/mortgage, power, insurance, rates etc.
This will obviously vary depending on where you are, but don't forget to check it out!
Who wants to pay more tax than they need to?