By Timothy Scutchfield
When you worked for a company out there in the “real” world, you really didn’t have to worry much about tax requirements. Your employer withheld income taxes from your paycheck according to the information that you provided on your W-4 form. Your employer also withheld FICA from your paycheck and he doubled that amount when he made those tax deposits because he was responsible for paying half of your Social Security and Medicare benefits. If there are state income tax requirements in your state of residence, your employer took care of that for you as well.
If you have started working from home, whether as a contract employee or as an Internet business owner, you are now responsible for withholding those taxes yourself and making those tax deposits as required by law. The average business owner will be required to make quarterly tax deposits. These quarterly tax deposits include income tax owed plus ALL of the FICA and Medicare benefits payments.
The government is not very forgiving. You are required to make quarterly tax deposits, and if you don’t make those deposits, on time and in full, you will be charged not only interest on the funds that you didn’t pay, but penalties for not paying the funds AND for not filing the reports when you were supposed to. Those penalties and that interest can add up in a hurry.
The very best advice about your work-at-home tax requirements that I can give you is to keep good and accurate records or have them kept for you, file your tax reports on time, and make your deposits on time. That is the least expensive way. Believe me!
The IRS is tenacious. It has little patience with individuals who don’t file taxes on time and pay their taxes in full, and even less patience with businesses who don’t abide by the tax rules and laws.
Thank you,
Timothy Scutchfield
Contributing Editor
www.Top5OnlineJobs.com
