Tax Answers for Home-Based Businesses

When you start your own business, your tax situation will

change dramatically. Many new business owners get overwhelmed with the tax laws and regulations that govern their new venture. Luckily there are places you can go for answers to your home-based business tax questions.

State taxes
Laws regarding deductions, income tax, and sales tax vary from state to state. Contact your state's tax office for specific information about how taxes are calculated and collected in your state.

Federal taxes
Next, you will need to learn about the federal tax laws that govern your business. Here are some resources for federal tax information.

 

• The Internal Revenue Service. The IRS is, of course, the definitive place for information on federal tax issues. The IRS Web site provides comprehensive information for small businesses and also lists a toll-free number should you need more help. Spend some time at the IRS Web site until you feel comfortable with the new tax laws you will be facing.
• The Small Business Association. The Small Business Association site provides a wealth of information for small business owners. In addition to information on tax laws, you can find information on many topics that are of concern to small business owners.
• Nolo Press. Among their myriad legal resources, Nolo Press sells books, e-books, and guides that specifically concern small business tax issues. Their excellent Web site also offers free information, including a Small Business Taxes FAQ.
• The Social Security Administration. If you plan on hiring employees, you will need to be well versed in employment tax and other issues that face business owners who employ non-family members. You will need to know about withholding tax, state tax, and many other tax laws before hiring any new employees. This site is a great place to learn more about employer tax laws.

Taking the time to educate yourself about taxes now may help you avoid tax problems in the future. If you still have tax questions, contact an accountant or an attorney who is certified in handling tax issues for businesses. A professional will be able to help you understand the many tax laws that commonly baffle new business owners.

For more information, be sure to also read Tax Breaks for Home Businesses.