Index
A home office provides the opportunity to earn money from a hobby or as a necessity after having been laid off. Working from home may also become necessary when a family member has a chronic disability that needs frequent care. In families where both the husband and the wife work, sometimes one of the jobs requires relocating to a new city due to a company reorganization or promotion. In this case, the other spouse may need to work from home in the new city if the employer provides the opportunity to continue working from a remote location.
 Talk to a Live Financial Advisor |
 Dedicated Home Office |
Reasons for working from home:
Benefits of working from home:
Personality needed to work from home
Not everyone can work from home. If you are not self-motivated and you do not have the discipline
to work unsupervised, working from home is not for you. Some people need the camaraderie and
social atmosphere of an office. If the thought of being surrounded by four walls by yourself is depressing,
you should not work from home.
When you work from home, you also need to be able to deal with distractions. The job that you can do depends on the responsibilities that you have at home. If you have to take care of a parent or a sick spouse, you will need to be able to stop your work from time-to-time. In this case, you cannot have the type of intensive work that requires constant attention. When you need to take care of domestic obligations, your work needs to be oriented toward achieving specific goals, rather than toward telephone interactions, child care, or other activities that cannot be interrupted without affecting your job performance. When your job is results-oriented, you will be able to accomplish your job even if you have domestic obligations.
Types of jobs that can be done from home
The jobs that can be done from home range from day-care for children to
high-tech software development. The following are the most common categories
of work-at-home jobs:
|
|
Equipment needed for a Home Office
Your home office should be a place where you can work comfortably. The office should have
good lighting, your chair should provide good back support, and your work area should
be ample enough to hold all your papers or equipment. You must be able to regulate the room temperature
so that you will not be sweating or freezing. Depending on your type of work, you may also need some
of the following:
The type of computer that you get depends on the type of work that you will be doing. The biggest percentage of computers use Microsoft's Windows operating system which has the largest selection of software. People who work in graphic design usually prefer the interface of Apple's Macintosh computer. A laptop computer may be appropriate for you if you do not like to be tied down to a desk. You can take a break from your usual surroundings by carrying your laptop computer to a recliner chair, a library, or an Internet café. The choice of operating system may not matter for e-mail or Internet access, but it is very important if you are developing computer software.
Discipline for the Home Office
When you work from home, you are responsible for managing your time and getting the job done.
Here are some useful suggestions:
Taxes and Record Keeping
When you work from home as the employee of a company, you will get a Form W-2 from your
employer at the end of the year. When you are an independent contractor and earn more than a few hundred Dollars,
you will receive a Form 1099-MISC. When you sell merchandise, you will be receiving
cash, checks or credit card payments.
In any case, you have to keep accurate records of your earnings as well as your expenses. If you have a dedicated space for a home office, you may qualify for tax deductions which will take into consideration the proportion of your home that is used for business, your utility expenses, real estate taxes, transportation expenses, as well as the cost of educational materials and business equipment that you need to do your job. If you are an employee, the regular and exclusive business use of your home office must be for the convenience of your employer.[1]
Saving for Retirement
When you have self-employment income, the tax laws allow you to
save a portion of your income and shield it from taxes through a Simplified Employee Pension (SEP) plan.
Contributions to a SEP account are tax deductible and your home business pays no taxes on the earnings on the investments.
Establish a SEP account through a financial institution that offers retirement savings plans and
choose the IRS model SEP, Form 5305-SEP, Simplified Employee Pension Individual Retirement Accounts
Contribution Agreement.
You are allowed to save approximately 25% of your income into the SEP account.
The money eventually gets taxed when you withdraw it after retirement.
References:
