Millions of people around the globe are just dreaming of the day they can stop waking up to the sound of alarm clocks and the smell of stale coffee with the sole purpose of going back to work for another long and gruelling day. The work-from-home dream is alive and well in a lot of us. The chance to be your own boss is too good for many to pass up on.
Especially in tough economic times, all different types of people turn to their computers in order to start up a business and have the freedom from the 9-to-5 lifestyle they’ve always wanted. The lucky ones among us are successful but it’s certainly no accident that a person finds success as a work-from-home entrepreneur.
If you were to take your time with starting up a work-from-home business and avoid the different get-rich-quick scams and avoid the pitfalls of rushed enterprise, you’ll find that there’s a lot that goes into starting any business. Something often overlooked is the tax implications of a home-run business.
Because you’re probably getting paid through PayPal, a check or some other cyber payment method, a lot of us just assume that taxes are not owed on this money. Nothing could be further from the truth, however. As long as you’re making income, you need to pay some sort of tax.
Every area of the world is different in exactly what type of taxes you’ll have to pay. Even in the United States, tax rates aren’t universal. They vary from state to state, with some states charging more income tax, others charging more social security, and other state-specific regulations.
When you’re working at a regular job and receiving a pay check, you don’t really take the time to figure out how the tax system works. Most people just look at their check, get mad about all the money taxed from it, cash it and forget about it. You’ll have to know a little about the tax scheme when filing taxes with your new work-from-home job. You shouldn’t avoid them.
Technically, you don’t have to pay taxes on your earned income. You could avoid it and keep all the money. But that’s not suggested for anyone. You could face major prison time for even filing your taxes incorrectly, much less avoiding them altogether. Even if you have to pay someone to figure them out – just as most do with regular jobs at tax time – you should do it.
The tax implications of a work-from-home business are going to be different depending on where you’re at in the world, naturally. The UK will have different tax rates than Romania. Turkey’s tax system is going to be different than Italy’s.
The onus is on you to do the research and to find out exactly what you owe and when you owe it. Don’t fail to pay your taxes. They will come after you sooner or later.