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Chapter 8. Taxes: Don't Get Caught Asleep at the WheelHere we are at the one chapter that makes everyone uneasy and anxious. Taxes. Everyone has a good tax or IRS story, and we're certainly no exception. One of the authors of The 60-Second Commute , whose name shall go unmentioned (she's the tall one), still gets a little jittery around the tax "subject." Why do taxes stir up so much anxiety? First of all, tax codes are complex, and the forms could send you running for a Valium. If you're ever feeling particularly masochistic, visit the public library or go online to the IRS website and check out Forms and Publications. Your head will explode. Second, these folks at the IRS take accounting very seriously. On one occasion, Kathy had the opportunity to meet an IRS agent in a social setting. While she can't remember a thing the woman said, she will never forget seeing the size of the agent's badge. Being afraid or nervous about taxes is a normal reaction, but that still doesn't let any of us off the hook. Grumble as we do, we all have to pay taxes to the federal, state, and local government. In this chapter we are going to review many of the tax subjects that are important to running a home office whether you are in business for yourself or a telecommuter. Use this chapter as a reference to help get you started. Every business can be a little different from the next , so contact your accountant or tax advisor with specific questions before you get into trouble. There are tax issues we must all get straight right from the beginning no matter what kind of tax filing we do. When it comes to taxes, there are deadlines and specific rules for filing. If taxes are paid late or not at all, there are financial penalties (usually with interest). When it comes to taxes you should know:
The complexity of your tax filing depends upon the type of work you do. If you are a telecommuter, tax filing is not as complicated or as daunting as it can be for a small business. A telecommuter or someone who works from home for another company might consider using one of the popular tax software programs currently available and file his or her own taxes. Currently, the best-selling tax preparation software in the country is Intuit's Turbo Tax Deluxe , Intuit's Turbo Tax , and H&R Block's Financial Taxcut 2000 Deluxe . These are the best selling because they are the most user-friendly, offer tutorials, provide expert tax advice, and guide you through the return process. But we caution you that user -friendly does not mean "easy" and using these programs requires more than simply punching in the numbers . You will need some degree of knowledge to understand how these figures correlate to one another. Bear in mind that mistakes will cost you when it comes to the IRS. |
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