It can be difficult to decide where to put your efforts: Home Based Business online or Home Based Business offline. I am going to share experiences of both types and list the pros and cons of each. I was working as a bookkeeper for much of the time when I had part-time home based businesses as well.
First I will address the offline type of best home based business ideas based on 40 years experience in several different types. Because I had studied accounting I realized that the highest burden of taxes fell on the wage earner and that anyone who had a business had some tax advantages that wage earners didn't. I recommend that before you set out on any home based business opportunity whether an offline business or an online business that you sit down with an accountant or tax expert that can help you set up your business.
It has been my observation that most people who get into business may be expert at a particular process but that they don't understand or have knowledge in the infrastructure of business either at home or in a seperate business facility.
A W-2 wage earner is someone who has the fewest tax deductions. A person who operates a home based business has the same tax advantage as a big business or a person who has an outside office and many of your on going expenses can turn into tax deductions if you have a legitimate home based business idea. You must have intent to profit or it's considered a hobby.
Be mindful that an online home based business opportunity unlike W-2 earnings will require that you pay taxes on your net profit. How that happens depends on the structure you choose; Sole Proprietor, Partnership, LLC or S-Corporation or Corporation. Check with your tax professional about pros and cons of each type. If you are profitable you may need to make deposits with the IRS during the year before you file your tax returns. So that being said your net profit may not be all yours. There may be self employment tax at about 15% and what you owe on income tax. Remember also that if the home based business idea is your only source of income you will be responsible for health care, provisions for disability and so forth. Consult with professionals before you start. Make the million dollars, not the million dollar mistake. You will have to pay for experience, either someone else's or your own which with learning curves could be expensive. I am not trying to discourage you but prepare you for some of the issues that business owners face.
Consult with material from the IRS as well as a professional. I am not going to give you tax advice but suggest that you find a tax adviser who can help you start home based business properly. It is very important that you keep good records. Document everything, this is where a day planner is crucial. The five W's are important on your tax record, why you did it, who you did it with, when; the day and time of the activity, what transpired and the business reason you met and where the activity took place. This might take extra effort but it is essential in your record keeping. You can go to http://www.irs.gov/ and find periodicals covering what you need to do to have home based office as well as what constitutes a legimitate business venture and not just a hobby.
Find something that you are passionate about, that you know or that has ease of entry. There are many service industries that don't take a huge investment to get started but adapt well to home based business idea. My husband and I have had a janitorial business and an online multi-level network marketing business. Our janitorial business eventually became full time and supported us for many years. We still have our marketing business and although the time invested is part time, the income is primary and retired as a W-2 wage earner in 1987. My husband was free as of 1991 due to the income stream from our marketing business. . I have had businesses in art, crafts, breeding horses, ice skating, bowling, sewing and now online in affiliate marketing. All of my businesses except janitorial, network marketing and affiliate marketing have started as hobbies and because I eventually became expert was able to start operating as a home based business.
My formula has always been to pursue my interest, get all the information as quickly as possible, invest in the best tools and teachers I could find and practice, practice and more practice. After a time I noticed that people around me were seeking advice and information and I realized that I could make money teaching as well as selling what I created. I then checked with http://www.irs.gov/ for guidelines on home office and set up my records accordlingly.
I also found that just because I was interested in something that not every one else is. It is very important to explore the market before you assume that you have a product or service that will sell. I have seen so many restaurants open up here in my community in the same building; there have been about 15 different ones in the 33 years I have lived here and yet one after the other, people continue to invest their lives, dreams and money in the same place and then a year or two later -- gone? Anyway check online at Google and see through keyword searches what people are looking for. If you do a search on your product or service and there are only a few pages on Google, you might want to rethink your position.
Well, that's all for now on this chapter in a home based business offline. Stay tuned for my next installment when I start talking about the good and the bad I have encountered in my search for a home based business
and how to develop money online. Rants and Raves on what I have already explored in online business that can become home based businesses.
A W-2 wage earner is someone who has the fewest tax deductions. A person who operates a home based business has the same tax advantage as a big business or a person who has an outside office and many of your on going expenses can turn into tax deductions if you have a legitimate home based business idea. You must have intent to profit or it's considered a hobby.
Be mindful that an online home based business opportunity unlike W-2 earnings will require that you pay taxes on your net profit. How that happens depends on the structure you choose; Sole Proprietor, Partnership, LLC or S-Corporation or Corporation. Check with your tax professional about pros and cons of each type. If you are profitable you may need to make deposits with the IRS during the year before you file your tax returns. So that being said your net profit may not be all yours. There may be self employment tax at about 15% and what you owe on income tax. Remember also that if the home based business idea is your only source of income you will be responsible for health care, provisions for disability and so forth. Consult with professionals before you start. Make the million dollars, not the million dollar mistake. You will have to pay for experience, either someone else's or your own which with learning curves could be expensive. I am not trying to discourage you but prepare you for some of the issues that business owners face.
Consult with material from the IRS as well as a professional. I am not going to give you tax advice but suggest that you find a tax adviser who can help you start home based business properly. It is very important that you keep good records. Document everything, this is where a day planner is crucial. The five W's are important on your tax record, why you did it, who you did it with, when; the day and time of the activity, what transpired and the business reason you met and where the activity took place. This might take extra effort but it is essential in your record keeping. You can go to http://www.irs.gov/ and find periodicals covering what you need to do to have home based office as well as what constitutes a legimitate business venture and not just a hobby.
Find something that you are passionate about, that you know or that has ease of entry. There are many service industries that don't take a huge investment to get started but adapt well to home based business idea. My husband and I have had a janitorial business and an online multi-level network marketing business. Our janitorial business eventually became full time and supported us for many years. We still have our marketing business and although the time invested is part time, the income is primary and retired as a W-2 wage earner in 1987. My husband was free as of 1991 due to the income stream from our marketing business. . I have had businesses in art, crafts, breeding horses, ice skating, bowling, sewing and now online in affiliate marketing. All of my businesses except janitorial, network marketing and affiliate marketing have started as hobbies and because I eventually became expert was able to start operating as a home based business.
My formula has always been to pursue my interest, get all the information as quickly as possible, invest in the best tools and teachers I could find and practice, practice and more practice. After a time I noticed that people around me were seeking advice and information and I realized that I could make money teaching as well as selling what I created. I then checked with http://www.irs.gov/ for guidelines on home office and set up my records accordlingly.
I also found that just because I was interested in something that not every one else is. It is very important to explore the market before you assume that you have a product or service that will sell. I have seen so many restaurants open up here in my community in the same building; there have been about 15 different ones in the 33 years I have lived here and yet one after the other, people continue to invest their lives, dreams and money in the same place and then a year or two later -- gone? Anyway check online at Google and see through keyword searches what people are looking for. If you do a search on your product or service and there are only a few pages on Google, you might want to rethink your position.
Well, that's all for now on this chapter in a home based business offline. Stay tuned for my next installment when I start talking about the good and the bad I have encountered in my search for a home based business
and how to develop money online. Rants and Raves on what I have already explored in online business that can become home based businesses.
