Toying with the idea, need advise

[pammy]

I've been reading up on ways to save come tax time. Time and again I read the merits of owning a small business. For me it would be from home for sure. I would like to know if anyone here owns/operates a small home-based business, even if it isn't for the purpose of the tax breaks. Any advise?

I do have one room I can use for a small office, it's this smallest bedroom I use for the computer room. I'm not really looking to generate tons of extra income. Although it would be nice, I'm really geared more towards finding that perfect middle-ground where I can have a 'hobby' that may or may not bring in extra income with plenty of tax benefits, but still leave me my extra time that I use to stretch dh's income to it's max. Hope I said that right.

Are web-based businesses the way to go? Is there any alternative? All replies greatly appreciated, thanks!!

[SHOPGIRL]

Well, if you claim a home office tax break, that does increase your chances of being audited.

I've filed a schedule C when I've had my own business, but I've never claimed the home office tax break. There are a lot of tax breaks you can get for having a small business. I think its worthwhile.

[PrairieRose]

It's definitely worthwhile to run a small bus. out of your home, but as shopgirl says, that home office deduction is almost not worth it b/c of the red flags. You also have to keep in mind that if you claim deductions for a small bus. after the first year or so you have to start to show some income on the positive side b/c they IRS knows that noone will run a bus. for long if they aren't making some money of some kind. Be very mindful of your receipts for items purchased for your bus., keep them all.