Home Based Business

So everything is good in the land of home based business. You have started your business, you are meeting clients, making some connections, hopefully generating revenue, but definitely creating a lot of expenses, you file your Schedule C and all is well.

Think so? Think again.

Did you know that the IRS can disregard all of your home based business expenses? Well they can, even if your business is legitimate.

Here are some steps to prevent that from happening or to show proof that the home based business is legitimate:

(1) If at all possible develop written agreements between your business and your clients.

(2) Develop a written business plan that shows how you plan to make money, identify your target market, identify the products or services you plan to provide and possibly a price list.

(3) Document all business expenses and revenue (an accounting system of some kind would be great to have here).

(4) Open a separate bank account for your home based business that way your personal funds and the funds of the business are separate.

(5) Engage in working the business on a consistent basis.

(6) Be sure to follow these five points of advice and if you need further assistance visit www.thetowlesgroup.com.