Many people around the country enjoy being able to work from home.  There are a number of benefits and advantages that accompany individuals who are able to work from the comfort of their own home, working their own hours and doing what they personally want to do.  Some people are not as responsible as they need to be when it comes to sitting down and forcing themselves to work, and some people are the opposite and find themselves obsessively working around the clock.  There are benefits and drawbacks to almost any action that a person does.  However, many people are not aware that when it comes to taxes, there are some distinct disadvantages to working from home and acting as one’s own employer. 

Working from home sounds great, but the income that a person makes by working from home is not taxed each week or month.  Each job does not have appropriations made to the government, both federally and locally.  This may sound great in theory, but it can cause some problems later on.  An individual, assuming they file their taxes correctly, will eventually be responsible for making sure that the governments receive their shares of the money that the person was able to make by working from home.  Not only do they have to pay regular taxes, but there are also some self-employment taxes that need to be considered. 

If an individual is not taking all of this into consideration as the year goes on, they can be taken aback when they receive their bill.  This can be very detrimental if they have not been saving up to pay it, since there are no withholdings and no way to be sure that there is enough to cover what will need to be covered.  No more is this true than when it comes to people who are working from home for the first time.  They may not have any idea of what to expect when it comes time to do their taxes.  These people may be used to making a certain amount and they may not be ready to spend the money that they have, since they are used to being able to keep that money at all times and spend what they would like of it. 

Another potentially detrimental aspect of working at home when it comes to taxes is that the deductions of self-employed individuals are pretty thoroughly scrutinized.  Some people have the mistaken belief that they can write off almost anything for their personal life and have it count as a deduction for their taxes.  This is simply not true.  However, many people try this and many people are they surprised when it turns out that they have been audited.  This attempt is not a new one and the government is very aware of the practice of this specific concept. 

Auditors are especially cautious and if they see something that is suspicious, they are rarely hesitant to act on it and ask for more details.  If a mistake is found, the government has the option of looking back even farther into an individual’s records.  This can be very stressful for the individual and helps to illustrate why it is so important that a person consider these factors prior to deciding to work from home, and that the person be aware that trying to cheat on taxes is rarely beneficial.  An honest individual who works from home can reap a number of different benefits, but it is important to remember that even thought there are many positive things about the situations, there are also drawbacks when it comes to taxes and tax information for the self-employed individual.

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