One of the major points many overlook in starting a business from their home is the type of entity they create, determining a tax strategy and how important it is to choose the correct ones. You don't always have to start out in the perfect entity but you should have a plan to migrate to it as soon as possible or as soon as the funds become available.

This is important because there is a major difference in the way entities are taxed. If you are filling your taxes under your personal social security number, you will be filling a separate schedule C on your 1040. If you have created a separate entity (Corporation) you will file a completely separate filing.

So what is the difference? Lots, One is legislated so that someone else (Governing Body) determines what you can or can not deduct and the other is not. A corporation's by-laws and business plan determines what is deductible or not, and that makes a huge difference.

Tomorrow focus on Europe...