Tax Time & Home Businesses

Depending on the complexity of your home business, you may find you can do the bookkeeping yourself (perhaps with the help of systems like Quicken and Turbo Tax).  Or you may need the aid of an accountant to help set you up and then do the final tax preparation.

If you hire any employees, then you will have more work to do and probably will want to get an accountant’s advice.  Generally we think of home businesses as family run operations.  However, some home businesses do hire one or more employees.  With emplooyees, you have (in the US) W-2 forms to give to employees by January 31 and file with the federal government, also with some state governments.

Also, in the US, when you use independent self-employeed persons (those who own their own businesses but do some contract work for you), you have to send them 1099-Misc Income forms if you’ve paid them $600 or more.  These also must be filed with the government (Federal and often state).  They have a deadline, too, and should be mailed to the independent contractor by January 31 and filed with the government by the end of February.  (There are monetary penalties for missing W-2 and 1099-Misc deadlines.)

As tax time approaches (and some of you in the US may have filed your taxes already), you’ll want to check to see if you have all your necessary forms and whether you’ve given out those required.

(Check the IRS (Internal Revenue Service) web site for the exact information about these and any other tax questions, especially if you don’t have an accountant to consult.)

            There also are a variety of tax guides you can consult concerning taxes for a home or small business.