Question by mizicepickle: Several Q’s about having a very small home-based business in IL. Can you help?
To supplement my regular job, I have a home-based job (self-employment) earning less than $ 250 a month doing invoicing for a small local company. A portion of my and my husband’s office/study is set aside solely for that job, complete with necessary office equipment.
I’ve come to understand certain expenses can be deducted; such as a portion of our mortgage, taxes, utils, etc. Does anyone know where I can get information on home business tax laws for Illinois? Is this something requiring an accountant or can it be done on my own? Does anyone have any personal experience with this sort of thing and can offer an honest opinion as to whether or not this small a side job is worth the tax and other hassles—or perhaps think I’d need another small job or two to make it worth the effort?
Thanks in advance for any and all useful, pertinent advice you can provide!
Answer by hirebookkeeper
Go to IRS.gov and search business expenses. There is a nice booklet to download. As far as state taxes go, you can go to your state’s website and look up new business, business taxes, etc.
For $ 250.00 a month, the IRS might see your business as a hobby, though my tax business is less than that per year.
Tracking and calculating utilities, depeciation taxes for the home office will be a pain in the neck. Be sure you have a separate checking account and pay all your expenses through it or a separate credit card.
What do you think? Answer below!