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What help can you expect from Uncle Sam when starting a small or home?

The government has numerous agencies designed to help a small or home business get started or to keep going. There are financial agencies, there are tax assistance agencies, and there are counselors both paid and free who are there to help.

A small business or home based business owner can definitely benefit from using a
firm trained in business deductions when filing income tax reports. National chains such as H and R Block, Jackson Hewitt and Liberty Tax Service are among the top professional tax preparers.

Each type of preparer has advantages and disadvantages, the most important thing to
remember, says tax attorney Dennis B. Drapkin, past chairman of the American Bar
Association's tax section, ".. is that you are legally responsible for paying the
taxes you owe no matter who prepares your return". If you follow poor advice and end
up with unpaid taxes, you bear the consequences, which range from interest and penalties to imprisonment if you're convicted of knowingly cheating the government.

To repeat his statement "You are legally responsible for paying the taxes you owe
no matter who prepares your return". This means most small business owners and home
business owners should see this as a red flag. No one wants to pay fines, interest and penalties, or suffer imprisonment.

Besides this legal issue, the average tax payer whose started a business, does not know what deductions he or she can or cannot claim. There are many deductions for home businesses that can help greatly. So paying a professional can return to the
business person, probably more than the cost of the tax preparation.

The IRS Web site,, provides some help and is a convenient source for forms
and links to state tax sites. The AMT Assistant helps taxpayers determine their AMT liability on their own. Check The IRS taxpayer assistance hotline at 800-TAX-1040 (800-829-1040) also offers help. But some studies have found hotline help inconsistent. (If the guidance an IRS rep gives is later determined incorrect in an
audit, you're required by law to pay the correct tax. The agency will not charge you a penalty.)

The IRS also operates Taxpayer Assistance Centers that can help you solve small business tax problems. You can check online at
Using a paid preparer is no guarantee that you will pay the least amount due. According to a Government Accounting Office study, as many as 2 million taxpayers overpaid their 1998 taxes by $945 million because they failed to itemize deductions--and half of the two million used paid preparers.

There are numerous companies in many states that are organized to help you with your small business or home business. They assist technology businesses.

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

The IRS says that thousands of home businesses are started every year and as many as 70% are still in operation after 2 years. The IRS specifies that a home-based business must have its own location away from the family living space that is devoted exclusively to the business. The business must be in regular operation, profits must exceed expenses in order to claim deductions, the business must be conducted almost exclusively in the home and the motive must be profit.

It may be difficult to raise capital. The average home-based business requires about $10,000 in start-up costs. Although this may be much less than opening a business outside the home, both the start-up and operating funds should be in hand before beginning the business operation.

Help is available. The National Association of the Self-employed (NASE) can provide help and information, as well as your local SCORE office. Find SCORE on the website to meet face-to-face with a professional business counselor.

Home-based businesses are fast becoming a popular way to operate your small company, while reducing expensive start-up costs such as leasing space, lease hold improvements, utility and phone deposits and major office equipment.

The Internal Revenue Service (IRS) tends to audit home-based businesses more frequently-especially when they are writing off a variety of expenses, including the percentage of the mortgage or rent for your office space. There are several good record keepers such as Day Timerr, Franklin Questr and Day Planner that will help you keep track of your expenses. Your accountant, (a CPA is recommended,) can advise you on deductions you can take and records you must keep for the IRS.

The classes offered by the SBA (Small Business Administration) are numerous. Some include:

Free online SBA classes
1.Small Business Primer: Guide to Starting a Business
2. The Beginning: Developing a Successful Business Plan
3. Starting Your Small Business

4. Business Plan Workshops
5. Identify Your Target Market
6. My Own Business (A Free Course)
7. How to Start a Business on a Shoestring Budget via Trump University.

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