The idea of working from your own home is always wonderful; sadly, sometimes the reality doesn’t necessarily live up to the dream.Organization
Most moms choose to work from home so that they can spend more quality time with their kids - also how many people really like commuting to a corporate office on a daily basis. Obviously, the type of work or careers that can be pursued from the home base might be limited, but with a little imagination, then working from home can, in fact become a practical solution for many.
One of the first tasks is to realize that working from home necessitates good organizational skills. The home worker is responsible for his or her own bookkeeping, timekeeping and tax. For some moms the easiest option is to use an umbrella company. These companies take the hardship out of accounting and also will help prepare the correct paperwork for the IRS. The companies will claim a small commission percentage but the home worker can also have peace of mind that their tax affairs will be in order.
Major corporations all claim allowable tax expenses and any freelance worker can do the same. Once you’ve decided to work from home then a trip to the local IRS office might be a good idea in order to discover which working expenses can be offset against tax. A small notebook or software program is essential in order to mark down how much has been spent on work computers, work related ‘phone calls and other necessities. Remember to keep all receipts for expenses as they are the proof that not all payment received is profit and that some has been spent to further the business. The umbrella company of choice will be able to help detail your bookkeeping and will also be able to offer advice.
The US government publication IRS 503 lists the different claims that can be made by self-employed moms and it’s a good idea to try and read this publication in order to see whether working from home is a financially viable option. Some of the same rules that apply to childcare can also relate to ‘dependent relatives’ so if mom or dad need care then these expenses may also be tax deductible. One of the bonuses of using an umbrella company is that they can advise the working mom about all of these issues so that the mom can concentrate on her fledgling business.
The key to working from home is to make sure that the planning of the proposed business has been worked out in advance. Make a business plan where the details of target income and projected expenditure can be mapped. Ensure that the business has a separate business account and even if online banking is preferable, ensure that you receive paper copies of everything. Set up separate lines of communication that will be used solely for business purposes rather than by the rest of the family.
All of this hard work will reap dividends and will allow the self-employed mom to sit back in the future and enjoy the fruits of her labor.