Unofficial Tax Guide

Each day a number of individuals make the decision to work from home or start their own business. As exciting as this time and process may be there are some individuals are unsure what to do when tax season rolls around. A common question that many small business owners or work-at-home individuals ask is whether they should file business tax return or a personal tax return. The answer that these individuals are looking for can vary due to a number of varying factors.

Individuals who operate their own business are often required to report their business to their local or state government before they can begin operating. This is sign that a small business owner should be submitting a business tax return. A common form that many small business owners submit to the IRS is a Schedule C. A Schedule C is also commonly referred to as Form 1040 or the Profit or Loss from Business form.

There are two main types of individuals who work from home. An individual can be working from home and still be the employee of a traditional company or an individual who occasionally does freelance work. An individual who is a full or part-time employee of a traditional company that allows them to work from home can still file a traditional personal tax return. Although employees are working from inside their home many businesses treat their work-at-home employees as if they were still working inside the same building.

Freelance workers may include, but are not limited to, writers, photographers, graphic designers, or website designers. Freelance workers who occasionally complete projects, but do not officially operate a business, are able to file a personal tax return. Freelance or self-employed workers are not required to file a tax return if they made less than $600 for the year. Freelance workers who have completed a large assignment are required to fill out a W-9 Form. This form allows businesses to have the personal information of a freelance worker on hand to send them a W-2 form as proof of payment. As with a traditional personal tax return, all W-2 forms must be attached to a tax return that is being filed on paper.

It is possible for a small business owner or a work-at-home individual to file and prepare their own taxes; however, some of the paperwork may be a little bit difficult for the average individual to fill out on their own. When in doubt seek the help of an experienced tax professional. Supplying incorrect business information may cause a delay in a potential tax refund or may even result in a business or individual being audited.