Can I Really Work from Home and Make Money? - dummies

Can I Really Work from Home and Make Money?

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

Can you work from home and make money? You’ve seen ads: Earn $5,000 to $10,000 a month working at home. In your spare time, no less. Most of these get-rich-quick schemes are bogus and even fraudulent. They seem to be cooked up by the same people who promise a 25-pound weight loss in a week with no dieting.

But that doesn’t mean you can’t make money working by yourself and from your own home or small office. In fact, according to The Wall Street Journal, independent contractors are typically paid 20 to 40 percent more per hour than employees doing the very same job. Why? Because the hiring firms don’t have to pay them additional benefits, including health insurance, sick leave, workers’ compensation, and so on.

The companies also have absolutely no obligation to their outside contractors. It’s no wonder they can afford to pay higher hourly rates. The only drawback to this plan is that if you’re in business for yourself, you need to think seriously about providing yourself with the most important of these benefits, including a good health plan.

The ranks of the self-employed can also come out ahead by taking advantage of various business-related tax deductions. These deductions include necessary expenses related to your work — as long as the expenses are both reasonable and typical for the type of business you’re in. You can even deduct the expenses of running a home office.

Take a look at IRS Publication 587 (Business Use of Your Home) to see if working from home is right for you. This is available on the IRS website. The IRS website also has the new simplified option for figuring out the deduction for home businesses, called the “Simplified Option for Home Office Deduction.” If you’re self-employed, you can also establish your own retirement plan, which can offer tax advantages.