All money-making entities have to pay their taxes regularly and on time so that they can be on the right side of the law. If you think that doing a home-based job exempts you, you are mistaken. After all, you are making money even if you are not going for a 9-to-5 office-based job. Essentially, a home-based job or business is the one you run out of your home. These are typically small operations that are started by individuals without investing much capital or renting an office space.
You may run it as a sole source of earning or as a side hustle. Further, you may do a home-based job to supplement your regular income for more savings and a better standard of living. If you know home-based jobs well enough, you will understand that paying taxes is mandatory for people who do them. And if you have tax issues or don’t understand how you will be taxed, a tax attorney can help. Let us know more about the role of a tax attorney in this context.
What jobs come under the scope of home-based jobs?
As the name suggests, all jobs that are done from your home come under the category of home-based jobs. It could range from production and sales of crafts to baking and food production. Online services and calling services also come under the coverage of his category. Alternatively, performing your office work from home or telecommuting from home is also considered as a home-based job. It is to be noted that home-based jobs are becoming widely popular and a reasonably large chunk of the population in the country is doing them at present.
What are the common legal issues that taxpayers with home-based jobs face?
The first concern for people doing home-based jobs or businesses is about how they would be taxed and the deductions that they are entitled to. If you are using your home office exclusively for your job, you may claim deduction for a proportion of home-related expenses such as property taxes, mortgage interest, homeowners insurance and utilities. At the same time, you can also get deductions for travel expenses if your home-based job involves traveling. On the other hand, you will not be entitled to deductions if the employer reimburses the expenses. When it comes to self-employed people who work from home, they are not considered as employees. However, they can still claim the deductions similar to the ones that people working remotely do. Another issue that you may face while doing a home-based job relates to timely return filing and payment. This is something that you may overlook or not do because of the sheer lack of awareness.
How can a tax attorney help?
Collaborating with a seasoned tax lawyer is a great idea if you face one or more tax-related issues while doing a home-based job. From helping you claim the relevant deductions to managing taxes, ensuring adherence to deadlines and more, there is much that these professionals can help you with. Also, these tax attorneys can help you avoid further penalties by ensuring that you are complying with all the IRS norms for home-based jobs and businesses. Look for someone who specializes in this domain so that they have the right expertise and experience to help with the most complex issues.
How important it is to have records?
If you are doing a home-based job, you must have proper records of the income and expenses. Unless you have then, you will not be able to calculate the taxes and claim deductions at the time of filing a return. The IRS recommends having a written record in case questions arise about the deductions for your home-based job later on. Alternatively, you can also keep valid records on your computer. When you make a tax-related expenditure, make sure that you save the proof of payment for later reference. An accounting professional can help you with the records, while a tax lawyer can guide you if you have any concerns about the legal implications of record-keeping.
The flexibility and convenience of home-based jobs are unmatched. Though everything about a home-based job sounds exciting, there is a major misconception that people have. You may think that you will not be taxed by the IRS for your income but the truth is just the opposite. There are some legal and taxation requirements that you need to comply with while doing them. A qualified tax lawyer is someone who can guide you about simplifying taxes and being on time with your filing and payment requirements issued by the IRS.