Housecleaning Business

2009-05-06 by

Today TaxMama hears from Blanca in Arizona who needs to know. “We are receiving food stamps. My husband might be getting unemployment benefits soon. However, I just started working for a small company cleaning their houses. I am charging them $100.00 a house and might have about 5 per month to do. They asked me to fill out a W-9 form to cut the checks in full amount to me. Will I have to report anything to the IRS? Do I have to claim anything to the state that might affect my assistance I’m getting?”

Dear Blanca,

You’re in business now. The company you’re doing work for will be issuing a 1099 at the end of the year, which will go to both IRS and your state.

So, if you’re on a food stamps program, be sure and let them know about your additional income. I don’t know the income limits in your area. But it is possible that you might be disqualified from the program. Find out before you take on this project.

If the income you expect to earn is less than the value of the food stamps you’re getting (after tax), think carefully about whether or not you want to do this.

On the other hand, once you have a contract with one company to clean their houses, perhaps you can get contracts with other companies – and make enough of a living to actually become financially independent of that system.

Since you’re in business, I urge you to meet with a good local tax professional and start getting familiar with your filing and payment responsibilities.

For instance, you need to make quarterly estimate tax payments to cover the self-employment taxes on your earnings. http://www.taxmama.com/Articles-cur/es.html

Consider taking a look at IRS Publication 334 – Tax Guide for Small Business to learn about your responsibilities and tax benefits.
http://www.irs.gov/publications/p334/index.html

You’re entitled to a whole host of deductions to reduce your overall profits and taxes. You’ll find that information in The 100% Home-Based Business Tax Solution. http://snurl.com/homebiz-tax

It comes with a Tax MiniMiser to help you keep track of your mileage, income and expenses. It can be a complete bookkeeping and filing system for your business.

And remember, you can find answers to all kinds of questions about new businesses and other tax issues, free. Where? Where else? At TaxMama.com

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# | Posted in Tax Quips | Comments » (4)



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  1. Carolyn Sellers Says:
    May 06th, 2009 at 08:13 am

    I thought you would have strongly encouraged her to get off food stamps and earn a living. If she gets more money in food stamps, she should think carefully about doing this????? Are you kidding me.

    Usually you are in their face on things like this.

  2. Deb A. Says:
    May 06th, 2009 at 10:01 am

    The following paragraph did precisely that !
    "On the other hand, once you have a contract with one company to clean their houses, perhaps you can get contracts with other companies – and make enough of a living to actually become financially independent of that system."

  3. Rhonda Barsamian Says:
    May 06th, 2009 at 03:22 pm

    You can report your income and expenses monthly to your caseworker. Your net business income is used in the qualification for our Federal Food Stamp Program. Using Taxmama's Tax MiniMiser Program will help you figure these amounts and provide you with the documentation needed to report to your caseworker alongside everything you will learn about running a small business. You stated $100 per house/5 monthly may lower your monthly amount of "help" purchasing food for you and your family, however, during these times our government is seeking to be helpful and just raised the monthly allowances. I encourage you to follow through cleaning these houses, read and learn all you can on how to build your business. Look forward and remember; cleaning 5 houses today can become 10 real soon, 10 to 20, and so on. (You get the idea) TaxMamas sites have all the information and resources you need. Also, your husband's unemployment income should solely be based on his last 5 quarters of wages he received from his employer if the employer was required to pay state unemployment insurance. So this is no reason not to begin working for yourself. Perhaps you can employ your husband down the road or better yet he can help, make a few dollars to report to unemployment! Do not be afraid to begin something new and creative even in these times. Everything is anew!

  4. Roger B. Adams, EA Says:
    May 07th, 2009 at 12:44 pm

    One thing about America; it is the land of opportunity if you are willing to work really, really hard.

    I am familiar with two immigrants from Portugal who came over in the 60's to escape the Salazar regime with virtually no money.
    Husband never did learn to speak English and worked as a building superintendent and handyman and wife worked at a supermarket slicing meat in a freezing cold room. They had an infant child.
    They bought nothing for years and lived like dogs in the Portuguese section of Newark, NJ. They saved every nickle they earned.

    When they died, they left an estate of three and a half million dollars; derelict apartment buildings refurbished singlehandedly by the husband and then rented out, land in America and Portugal, and cash; amazing really.

    Their son graduated with an advanced degree from a very prestigious University and currently holds an extremely important job in a major corporation.

    Now,consider that if you wish to stay on food stamps that is certainly fine, but it dooms you.

    If you can work like a donkey, live like a dog, and do that with honesty and righteousness you may end up better than where you came from.

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