How To Deal with Home Business Taxes New Mexico

Whatever business your are in, the moment you say 'tax', Government is in the picture and anything you have to do with Government, irrespective of which country you belong to, is fraught with rules, regulations, laws, by-laws, registrations, forms, exemptions and notifications.

In a home business, at least to start with, you have to mantle all roles related to production, marketing, public relations and accounting. However, it may not be worth it for you to waste your time and effort on the slippery area of taxes.

1. First take generic advice from the Tax Consultant about the type of taxes you may have to pay: You will be confronted with Income Tax, Sales Tax/ VAT (i.e. Value Added Tax, if you are producing goods), Service Tax (in some countries where it is not considered under VAT), Professional Tax (in some countries/ some specific regions), Excise Duty, Customs Duty (if you are an importer) and so on.

   Depending on whether you are going to be a trader, seller, re-seller, a product manufacturer, importer, exporter or a service provider, there will be different classifications, minimum turnover limits for taxability, different tax rates, rebates, scope for adjustments between taxes paid and taxes collected, incentives for exports and so on.

2. Find out the type of taxes you will be exempted from: In many countries, small and home business with small turnover may have exemption limits for collecting and paying taxes and also concessions on the extent of book keeping and paper work needed.

   For example, in India, Service Tax is exempted up to a turnover of Rupees 0.8 million (as in the year 2007). Thus a home-office website developer whose annual turnover is going to be less than this limit need not concern himself with Service Tax. As no product is manufactured, he has no other tax issue to bother about, except of course his income tax.

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Author: C.V. Rajan