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Finance Tips for Home-Based Businesses

This is a guest post by Carly Lance.

Running a blog from home can be an exciting business opportunity. Underneath the fun of writing posts, editing photos and making industry connections, however, is the dread of finances. Tax time is challenging for any business owner, but especially for people who work from home. When you’re your own manager, secretary, assistant and accountant, the responsibilities can quickly stack up. Fortunately, it’s simple to keep your financial life in order. Try one or more of these tips if you want to keep your finances running as smoothly as your business:

Come up with a tax strategy

If you’re blindly earning money without giving much thought to how you’re going to pay the piper, you may wind up owing more than you’d like at tax time. Sit down with a tax consultant, if you can, and come up with a strategy. There are certain tax laws you can only take advantage of if you plan for them. For example, you can deduct the cost of a home office on your taxes – but only if that’s your primary place of business and you only use the space for your business. Devise a plan in advance and stick to it.

Break up your taxes

Part of the reason taxes are so overwhelming is because it’s a big chore to do all at once. Instead of waiting until April to start working on your finances, set aside half an hour each week to go through your receipts and books. Use this time to pay bills and set financial goals for yourself. You may even want to set up files for receipts, separated into business and personal accounts. This can be immensely helpful when filing taxes.

Work with an outside accountant

There’s nothing wrong with turning to an expert for help, especially if you’re just getting started. They can help steer you toward financial habits that will make running your business much smoother. Tax accountants in particular can be helpful when you’re trying to determine if that expensive lunch with a client counts as a business expense. Managing your finances can be tricky, especially when it comes to taxes, so don’t be afraid to get help.

Keep your personal life out of it

One mistake that many first-time business owners make is combining their personal and business accounts. If you’re working from home running a blog or website, you may not think you need a separate account. However, the hassle of managing two accounts will make your life much easier when it’s time to figure out your finances. A separate account will make it crystal clear which expenses were part of running your business.

Getting your financial life in order is tricky enough without the added complication of running your own business. However, with a little planning and a couple of simple tricks, you could be in great shape sooner than you think.

About the Author

Carly Lance loves to blog about personal and small business finances whenever she can. She also is employed as the blog and marketing manager at PersonalBankruptcyCanada.ca, a company that deals with people going through bankruptcy in Canada.

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One Response to 'Finance Tips for Home-Based Businesses'

  1. Ernesto says:

    Thank you Carly and Lisha.
    Those are awesome tips.
    It is a write downer. 🙂
    Ernesto

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