May 29th, 2018

One of the biggest benefits of being an entrepreneur is working whenever and wherever you like. If your small business is based out of your home, you can take advantage of significant tax savings. Of course, the tax maze is always complicated, and it gets even more difficult when you combine business and personal expenses. Fortunately, small business specialists like Certified Tax Coach Larisa Humphrey, EA, CTC, CTS are available to offer you expert guidance. She shares all of her secrets in our new release, The Great Tax Escape.

Planning for Success

As with any major financial undertaking, creating a comprehensive plan is critical to your success. When it comes to your home-based business, the planning stage may start before you even know what product or service you want to sell. Some of the questions you have to ask include these potential deal-breakers:

  • Do you have the knowledge, skills, and abilities required to run a home-based business successfully?
  • How will your business be structured?
  • Are there any local, state, or federal regulations that could prevent you from operating a business?
  • Which tax laws will apply to you?

If you discover that you don’t have the right characteristics to manage your own business, or there are local ordinances that will prevent you from operating the enterprise from your home, your initial concept may need to be reworked before you invest time and money.

Examining Your Options

Some home-based business owners are inspired by a particular product or service, and launching an entrepreneurial venture is the next logical step. Others are enchanted by the idea of owning a home-based start-up, and they are in search of the right opportunity. If you fall into the latter category, there are endless resources available online and at your local library. Some entrepreneurs even find their passion through like-minded business owners on YouTube. The most important factors in your decision are where your interests lie, what sort of experience you have, and which skills you have already mastered. While you don’t have to be an expert in your chosen field to start a business, a bit of background in the area will contribute to your success.

There are a couple of caveats to keep in mind. First, if your primary reason for starting a business is to gain the ability to work from home, you may wish to consider an alternative solution. Many organizations are hiring home-based independent contractors and employees for services such as customer care and technical support. This path reduces the inherent risk of owning your own business.

Second, beware of scams, pyramid schemes, and other get-rich-quick “opportunities”. These types of businesses often require a significant financial investment, which you theoretically recoup by selling to friends and family – and encouraging them to “invest” in a starter kit, too. Certainly, there are success stories with these sorts of businesses, but unfortunately, they are few and far between. More often, participants find themselves deeply in debt with lots of unsold stock. Spend a lot of time researching any organizations that interest you before you hand over a credit card number. Consumer organizations like the Better Business Bureau are helpful, along with social media forums and well-researched articles from a reputable news source.

Learn more about structuring your business, taking advantage of tax savings opportunities that are exclusively available for home-based entrepreneurs, and ensuring your long-term financial security in our new release, The Great Tax Escape. Available now on Amazon.