Home Business Tax

Home Business TaxSome people believe that it is better to makemoney as an entrepreneur than working for someoneelse. Though this is hard, the rewards are manysince the individual doesn't answer to anyone andall the profits goes to the person.Entrepreneurs also have to do something thatnormal employed people do. Though the forms aredifferent, these individuals also have to paytaxes which is mandatory by the government.The form that the entrepreneur fills up is called

a Schedule C form. This should be filed with thetax return so the income and expenses incurred canbe reported to the IRS. Those who don't know howto do this should follow these steps to avoidmaking mistakes.1. The person should determine the kind ofbusiness that exists. Is this a soleproprietorship or are there partners involved? Ifthe individual lets people sell the goods, thenit is considered to be a single ownership.2. As mentioned before, there are many forms usedin paying home business tax. If this is notrelated to fishing or farming, then the scheduleC is used.3. The person should get the schedule C form fromthe nearest Internal Revenue Service Office.People who only spend less than $2,500 that haveno inventory, uses cash accounting, did not incurany losses, have no employees and are not

deducting depreciation can use the C-EZ form.4. The person should fill in pertinent detailssuch as the name, social security number andaddress on the form. Should the individual act asa distributor of certain goods, the employeridentification number must be mentioned.5. The person should also write down the businessname. A brief description must also be mentionedaside from the six digit code that is one of thethings that also have to be filled up in the form.6. There is a portion in the form that will askabout the accounting methods used. If the personuses a simple cash method, that will not be aproblem using the schedule C form.7. The person should also answer yes or no if onehad an active role in the business. There are alsoother questions there which will have to beanswered if this was started up or purchased from

a former owner.Using the home to transact business is consideredtax deductible. All the person needs to do to takeadvantage of these measures is reporting this tothe IRS using the proper forms.