What are the rules for a home based Business.. as far as Taxes?

Answer 1

Same as any other business. All income is fully taxable and all reasonable and necessary business expenses can be used to offset business income.

You may be able to take a business expense for the use of your home for business purposes but the rules are strict on that. The area used for business purposes must be exclusively for business use. Any personal use of that space bars the business expense. There's an exception to the exculsive use rule for a home-based daycare service.

Answer 2

Could you be more specific? For example, if your home based business is construction, you probably can't park your trucks on your property (unless you have acreage).

You need to check your zoning laws if people will come to your house as your place of business - however, if no one comes to your house, then there is no problem.

There are also regulations regarding noise, deliveries, et al - basically if you start looking like a business you have a problem - but if you're doing something at home that is not noticeable to the neighbors you're ok.

Answer 3

If you made over $400 from your business, you are required to file a tax return and pay self-employment tax. If you are filing a return due to having other income, or a joint return with a spouse, you must report your income from your business even if it's below $400.