A friend was asking me if she should submit her income tax come April. She is like me, running a small home-based business, but her niche product is handmade accessories while I deal with lingerie.
This is a question that I have asked myself many times previously too. The problem is that home-based businesses like ours do not earn us a lot and worse still, income is so erratic and dependent on the amount of time we put in. I have often wondered if it's worth the hassle of keeping proper accounts and paying quite a lot to an accountant to help us with filing our income tax even, especially now that it's self-assessment.
I talked to a couple of friends who helped me find out what should be done for people like me from their tax consultants. Yes, I was too cheap to go and speak to one myself, in case they charge me consultation fees!
Anyway, I was told that even if we earn so low that we are not taxable, we still have to declare out income tax. A friend shared with me that he too previously did not declare his income and did not pay income tax. When he did, he felt that it was exceptionally easy to apply for a loan. In fact, his auto and home loans were approved within just half a day!
While I do not have any plans to buy a car, I definitely am planning to buy property in the capital city. I have been checking out prices for landed property for the past two years but unfortunately, still have not saved enough money for a decent house. I would need a home loan for that but am not ready yet to commit to a long term loan. It just scares me. I guess it is mainly because my income is too erratic.
Still, like I was told, even if we have no taxable income and do not plan to take out an auto or home loan, we would have to do this if only to keep the IRS at bay.
This is a question that I have asked myself many times previously too. The problem is that home-based businesses like ours do not earn us a lot and worse still, income is so erratic and dependent on the amount of time we put in. I have often wondered if it's worth the hassle of keeping proper accounts and paying quite a lot to an accountant to help us with filing our income tax even, especially now that it's self-assessment.
I talked to a couple of friends who helped me find out what should be done for people like me from their tax consultants. Yes, I was too cheap to go and speak to one myself, in case they charge me consultation fees!
Anyway, I was told that even if we earn so low that we are not taxable, we still have to declare out income tax. A friend shared with me that he too previously did not declare his income and did not pay income tax. When he did, he felt that it was exceptionally easy to apply for a loan. In fact, his auto and home loans were approved within just half a day!
While I do not have any plans to buy a car, I definitely am planning to buy property in the capital city. I have been checking out prices for landed property for the past two years but unfortunately, still have not saved enough money for a decent house. I would need a home loan for that but am not ready yet to commit to a long term loan. It just scares me. I guess it is mainly because my income is too erratic.
Still, like I was told, even if we have no taxable income and do not plan to take out an auto or home loan, we would have to do this if only to keep the IRS at bay.
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