One of the home business fields that is growing is blogging, and a work from home blogger may be surprised what kinds of tax deductions he or she might get. This includes such items as a Web cam (if you do video blogging) or the percentage of your Internet payment that would go to your online business. Tax Girl recently wrote a great article for Problogger about the 46 tax deductions that bloggers often overlook. Many of these even apply to other work from home business areas.

The caveat: make sure that you are, in fact, using many of the items solely for business. In the case of services and things like housing payments, figure the percentage of the service that you use for work, and that is what is tax deductible. A good accountant or tax attorney can help you figure out exactly what you are allowed to take.

One of the big things in the news right now is health insurance. And when you're self-employed, this can be a real pain to figure out. If you have a spouse that gets good health insurance through work, then great. But for many people, health insurance when self-employed is a little difficult. My spouse doesn't have health insurance, so we're responsible for it.

I personally found my health insurance at healthinsurance.org. There are other places where you can put in stats for you and your family and get quotes on a variety of plans. I chose an individual plan for me and my family. We were able to find a good plan through BlueCross, BlueShield for a about $340 a month. That's really not bad when you consider that many people who get it through their work pay close to the same amount. We've had it for more than two years, and it's been great.

And, on top of that (even if it is kind of expensive), it's tax-deductible. If you get health insurance as a self-employed person, then you can deduct some of the cost on your 1040. It's nice to know that you can get this deduction for providing proper healthcare to your family.

When it comes to having a work at home business, there are plenty of ways you can make it better. But it's important to avoid the pitfalls, too. Home Biz Note offers 9 Mistakes a Home Business Owner Shouldn't Make:

*Tell a customer they’re wrong or stupid and don’t know what they’re talking about…even when they have no clue.

*Don’t worry about meeting deadlines for producing an item or providing a service.

*Ignore a customer’s complaints.

*Fail to file taxes because it’s “just a little business.”

*Pay employees “under the table”

*Use “shoe box” bookkeeping.

*Cut corners on quality because “the customer won’t know.”  They should be glad I’m keeping the price cheap.

*Fail to return customers’ phone calls or e-mails.

*Fail to add all your expenses and overhead when determining price…then wonder why you keep losing money.

One of my biggest pitfalls was actually the last one. Even though I have minimal overhead, I sometimes forgot that I do have some expenses, other than my time, and it's important to factor in those expenses, and add them to the quoted price.

Until September 26, there's a cool contest going on over at Shak in Style. Here are the rules:

*Leave a comment on this post about your favorite home decor accessory. There will be other posts that refer to the UncommonGoods Giveaway but only comments left on this post will count as an entry.
*Link back to this post using the "UncommonGoods Giveaway With Shakinstyle" banner in a post on your blog or site.
*If you do not have a blog, leave your e-mail address and tell your friends. Your e-mail address will automatically register you for the UncommonGoods Newsletter.
*All comments must be entered by midnight, September 26th.

This means that you need to go over to the Uncommon Goods post at Shak in Style. Go ahead. Think about that great touch that makes your home office great. Then let others know about it!

One of the things that many people don't realize about a home business, especially one that can be one online, is that it does require work. It is important to put in the work with a home business. Just like any other business, making money online demands that you work at something and put in the time. One of the more amusing things I found this morning that underscores making money in a home business, is this, from Just Make Money Online. It's titled 9 Surefire Ways NOT to Make Money Online. Give it a read.

This whole week we've been looking at the three most popular kinds of set-ups for the home business. When you work from home, it helps to know your options. We've looked at the sole proprietorship, LLC and the S Corporation. And now I'd like to make a few points about why I chose the LLC for my home business.

As a freelance writer, I am unlikely to hire any employees. Therefore, payroll won't be necessary. An S Corporation is a bit superfluous in my situation. Not to mention adding undue expense that any benefits over an LLC wouldn't make up for.

A sole proprietorship was becoming too expensive in terms of taxes for me. While it is possible to set up an arrangement with the IRS to pay quarterly, it was still a bit much in taxes. Paying income tax AND self-employment tax was becoming too much.

I am happy with my LLC, and I am excited to go to the bank today and open a true business account.

Over the last few days, we have taken a look at different types of home business. Now, for the roundup of the basic advantages and disadvantages of each of the types of home business:

Sole proprietorship: No formal business arrangements, so it's easy to set up. You have all the power. But you also have to pay self-employment on all your income, plus your income tax, which can get pretty pricey.

LLC: Pass-through corporation that isn't Federally taxed. You are only self-employed taxed on your share of the distribution (I've made my distribution small -- 2%), and distributions to other partners aren't taxed as self-employment (my husband gets 98% of the earnings, but it all goes to the same place). But you will have to pay income tax. Takes some setting up, and some expense, and the tax forms start to get a bit complicated.

S Corporation: Same pass-through advantages as the LLC, but with some additional tax benefits. And the ability to raise capital more easily. Downside is that it is harder to set up than LLC, and you have to include payroll (and pay payroll taxes).

Another popular type of home business is the S Corporation. Like the LLC, it is a pass through business set up, meaning that profits are "passed through" the business shareholders (like you and a spouse or friend or relative). The corporation does not pay federal income tax (although some states require S Corporations to pay taxes). Profits and losses are shown as they go to shareholders. AllBusiness points out some of the advantages of an S Corporation:

Corporate losses can be passed through to the shareholders, and as the owner (and shareholder), you may be able to take the loss against income that appears on your personal return.

You can have the protection of limited personal liability without having to pay corporate taxes. 

You can minimize self-employment tax and FICA tax. Your profits, as a shareholder, are not taxed in this manner. 

It's easier to raise capital as a corporation than as a sole proprietorship or partnership.

However, with an S Corporation, you are required to set up payroll, and there are some other legal documentation things that you need to take care of. This can get expensive and/or time consuming. This is why I went ahead with the LLC. There is no need to set up payroll, and the liability protections of a partnership are in place.

I recently formed an LLC for my work at home business. This has advantages over the sole proprietorship (mentioned yesterday), mainly in terms of taxes. You can set up an LLC so that it has tax advantages that a sole proprietorship will never have. Here is how Gaebler Ventures describes the LLC type of business:

The profits or losses of the business pass directly through to the owners' personal income tax returns, on their Form 1040. The LLC files a Form 1065, and then lists each member's taxable profit on Form K-1. In other words, the LLC itself does not file taxes.

This is what we mean when we say you avoid double taxation with an LLC. In a corporation, it works differently. The corporation is taxed and, accordingly, must file taxes. Then, distributions to the owners are taxed. In essence, the government takes two bites out of your revenues instead of the one bite they'll take if you've form an LLC instead of a corporation.

You should be aware, though, that you need at least two "owners." For married folks, this is fairly easy. I just have my husband as the other owner. I am the general partner, and he is a limited partner. That means I make all of the decisions. But this would work with any other relative or friend you trusted.

If the above description sounded like it gets complicated on the taxes, it does. That's why this coming year I will be letting the accountant handle the taxes for the first time. An LLC costs between $150 (mine) and $300 to set up, depending on where you are. Many firms have a flat rate to do this. And I figure it will cost about $300 to get the taxes done. So my total outlay is $450. But on the plus side, I will be saving more than $4,000 on my taxes. So I consider it a net gain of about $3,550.

Last Friday, I intimated that this week we'd look at the three main ways to set up a home business. Well, it is next week, and today we will be looking at the advantages and disadvantages of the sole proprietorship.

A sole proprietorship is a common set-up for a home business. Why? Because it is simple and requires very little legal finagling to put together. Formal business requirements aren't even necessary in many cases, and transfer of business (including sale) can be made at your discretion. In fact, since you are a sole proprietor, you make all of the decisions.

Up until last week, I was a sole proprietorship. It was very easy. On my Schedule C (which is what you use to report your home business income in the sole proprietorship case), all I had to do was use my Social Security Number. It is not necessary to get a tax ID number for a business. And you don't pay corporate taxes.

But there is a major disadvantage: You pay your own self-employment tax. This can get expensive. I found out last year that as I began doing better, my taxes went up substantially. Now, paying taxes is important. But it is hard to pay taxes that are that large when you have a home business. Just think: you have to pay around 15% in self-employment tax. That can be pretty difficult in some cases.

If you start making a substantial amount, I would consider switching your home business away from a sole proprietorship. And if you keep it as such, consider contacting the IRS and setting up for quarterly self-employment tax payments. It will make it easier to swallow than paying all at once.

Yesterday, I finally went to see the accountant about setting up an LLC for my work from home freelancing business. Up until now, I have been a sole proprietorship. I got to thinking about the three main ways that use when setting up a home business: sole proprietorship, LLC and S-Corporation. So, next week we will take a look at all three. There are some advantages to all, and what you choose depends on what would work best in your situation. So, come back next week, and we'll take a look at the different options for your work from home business. Then you can decide which would work the best for you.

It can be difficult to start a business. But if you are looking for a way to marshal resources and even get some free stuff for your home or other small business, you might try heading over to B5 Media and entering their Jump Start Your Business! contest. Entries are being accepted until Sept. 25.

Some of the prizes are pretty cool, including stuff from Entrepreneur magazine, free Web hosting and even consulting advice from business and finance experts. But you don't just enter. You will need to be prepared to defend your business idea by explaining your idea, how you will make it happen and why you should win, among other things.

One of the questions that plagues me, as a freelance writer, has to do with ethics. I often wonder if I've quoted my interview subjects in context, or if I am doing my due diligence. Other questions come to mind that have to do with the ethics of freelance writing. And other home business operations probably have ethical questions that they face everyday.

But how ethical are you in your home business? Do you find yourself bending the rules? Rationalizing a bit? Maybe being a little sneaky or underhanded? Or do you block any of those tendencies out?

At Leadership Turn, Miki Saxon points out a study that says that humans are inclined toward self-deception when it comes to ethics. It means that they manage to convince themselves that some of their ethical behavior isn't really wrong. Here is one example Saxon uses:

Yup, Jeff Skilling still maintains he did nothing wrong.

I love the quote. And it illustrates beautifully how we all need to take a good look at how ethical we are in home business. And honestly answer the question: Is this right?

Ok, maybe I am dating myself to be quoting Sally Fields acceptance speech from the Oscars (or Jim Carrey's from the movie Mask for the younger generation) but being that I am a movie buff and all, that was the first thing that came to mind.

We may not have won an Oscar but is looks like Shakadoo is sure turning some heads these days. Many thanks to the International Listings Blog for naming Shakadoo as one of The Top 100 Real Estate Blogs.
If you want to go take a look, we are listed under the Home Improvement section at number 42. The numeric order is not a reflection of ranking but rather alphabetical order per category. Obviously, if it were by ranking then we would be listed as NUMBER ONE! Well, maybe TEN or TWELVE, but we are on our way.

Shak readers, go take a look at International Listings. They have a very informative site with great articles and gorgeous Luxury Listings to view too. And, they know a good thing when the

Pajama Mommy awakened me to whole new uses for scarves with Belisi. I've always liked long scarves. I think they're elegant. But I never really though about what else I could do with them. Pajama Mommy makes the point that you can turn them into purses. I personally think that hanging such a scarf on the wall or draping it somewhere would really brighten my home office. And the Belisi scarves are colorful and interesting.

Other suggestions for the scarves? Belts, headbands, ponytail ribbons. And when they get old (or even if they're new), you can use them in home and office decorating as table runners, lamp shades (watch out for the bulb, though!) and even as framed "art" for the walls.

One of the most difficult things about telling people that I work from home, and that I am a freelance writer, is the fact that most of them don't see it as a JOB. For some reason, working at home is seen as a sort of hobby by some people. Neighbors think that since I am at home working (while my son is at school) it means that I am free for a chat, or even to *shudder* watch their kids while they run a "quick errand."

Others think that they can just call me anytime because I'm "always home" or that I can always re-arrange my work from home schedule around whatever is happening. Not true! I have deadlines and responsibilities. When I first started, I tried to cram all sorts of things into my "work time." Not anymore. I've learned the power of saying, "I'm sorry, but this is my time to work." Unless it's an emergency, the time my son is at preschool is work time.

What about you? Do you ever find that home working leads to people thinking that somehow you don't have a JOB?

I found the answer to a very interesting poll from the Just Make Money Online Web site. The question was, not surprisingly, "Have you ever made any kind of money online?" And I thought to myself: what kind of work are we talking about? I mean, you can make a few bucks on eBay, but how many people really turn it into a true business? And what about people who work from home for "The Man," using some sort of online method to stay connected to work?

The truth is that the Internet provides all sorts of opportunities to make money, or to use effective marketing to make more money than you already make with a home business. But making money online is not, unfortunately, as easy as just plugging in as some marketers would have you believe. Instead, like any other work, it requires, well, work. The key to successfully earning a living via the Internet is finding ways to use the technology to your advantage, and using it to complement your skill set.

One of the start your own business opportunities that seems to offer ready-made solutions is the franchise. You pay the fees, and in many cases you get equipment, some advertising and a brand that many people already recognize. But as technology advances, the idea of buying a franchise takes on a whole new meaning. And you need to be careful. BusinessWeek points out that not all franchise opportunities are good ideas:

"These franchisees are basically going into an unproven, high-risk venture, yet they're also saddled with the fees and loss of autonomy and freedom associated with franchising," says Sean Kelly, a franchise consultant with Leola (Pa.)-based Idea Farm and operator of the blog Franchise Pick.

The main focus of this article is iSold It, a franchise that specializes in getting you to open up your own eBay drop-off business. You sell other people's unwanted items on eBay and then keep a percentage of the sales. Unfortunately, this doesn't work so well.

And there are plenty of other franchise opportunities just like it. "Opportunities" that don't work and end up costing you way more than you earn. 

I love the TV show The Office. So yesterday, when Season Three dropped on DVD, I went to get it. And since Best Buy was having a special discount on the gift packs, I bought one of those. Now, my home office is adorned with a Dwight bobblehead and a Dundie Award.

One of the things that can really make your home office (or any office for that matter) yours, is to add whimsical items that are relatively unobtrusive, but that can give you a little reason to smile while you are working. Every time I look a little to my left, I feel a little lift. I just hope the Dwight bobblehead doesn't distract me too much...

I found something very interesting this morning on Duct Tape Marketing. It's a post about overcoming the fear of being different. We are told when we are young that we are "unique," but at the same time we are encouraged to be like everyone else. We don't want to "rock the boat." When we start up a business, even a home business, we are often afraid to be different. We see that a certain something has worked for someone else, and we decide that we need to do that. But whatever "that" might be, it's been done. So you might need to do something different with your home business. Here is what John Jantsch of Duct Tape Marketing has to say about it:

You must get over the fear of being different and find a way to demonstrate that you serve a very narrow target niche, package your services in unique ways, provide an over the top experience, own a certain way of doing things, do something that someone wants like no one ever thoughts of - and then, proudly declare this difference in every fiber of your communication.

So, get out there and be different with your home business. It just might be the best business decision you make.

A good friend of mine had been working full time to find a new job. I am happy to say that all of her hard work has finally paid off! After months of job searching through many internet sites, as well as researching companies, cold calling, e-mailing and following up; only then did her real stress begin. She began worrying, anticipating, and anxiously awaiting every phone call for months on end. Finally, a few weeks ago she got the call ! The perfect job with a great location in an exciting field, with an ideal schedule! What more could she ask for? How did she get such an opportunity? Was it her extensive research or writing abilities?  Perhaps it was her persistent calling or perfectly timed follow up? No,it was through a conversation with a friend that led her to the position.

Networking within your sphere can lead to fantastic opportunities. What better than a referral from a friend or associate to a prospective employer? That referral  is a personal testimony on your behalf to another with whom they have already established a relationship. You really can’t get a better lead. I hate clichés but as we already know, “It’s not what you know it’s who you know”.

I agree with what George Blomgren at For Job Seekers, says in his post Networking: More Than A Door Opener . He writes;

"Your professional network can be an invaluable personal and professional resource, throughout your career. It’s a great source of career advice as well as solutions to everyday business issues. It helps you keep abreast of trends in your field. It provides invaluable insight into who’s doing what in your field and in your city. It enables you do generate good favor by creating “cross-referrals” for the people within your network.”

In short, it may be the best resource you have in today's job market. It is more important than ever to establish and maintain your network. A good start would be to build relations with quality people, who have good reputations and are upstanding in the community. In the meantime, make sure you are earning a good reputation for yourself among your sphere.  Earning a good reputation comes with being just that - reputable, dependable and accountable in all areas of your life. You never know who is noticing your habits and who your next referral may come from. Remember, someone who is giving a referral is putting their reputation on the line. So unless you are solid, you won't be worth the risk.

Lastly, surround your self with quality people. People are judged by the company that they keep. So keep good company! Network with people in your community, in your work force, in your associations, and most of all your friends. You may be surprised what doors can open for you.

When you have a home business, sometimes you need to attract people to your “office.” In places where zoning permits, it can be a good idea to put up a sign (in accordance with zoning laws, of course). But not a homemade sign. Mary Emma at Home Biz Notes points this out:

When I operated a dressmaking business and gift shop in my home, Mea’s Boutique, I did go to the expense of having a professionally made sign to place in front of our house.  It more than paid for itself by attracting customers and giving the impression that I was a professional.

Just as mentioned in the post on setting up your home business Web site points out that this is the window to your online world, you need to show professionalism in the offline world as well. This means that you should try to keep your home business area (that people see) neat and relatively clean. And if you call your home office an office, and you expect to meet clients there, you want it to look like an office.