Full-time house sitting is a great way to make money and reduce your expenses while seeing more of the world. If you're planning to take up house sitting on a permanent basis, though, you'll need to ensure that your finances are in order — and they stay that way. A CPA (certified professional accountant) can help. How? Here are five important tasks they'll help you with.
1. Tracking Income and Expenses
It may not feel like a regular job, but house sitting may be treated as a business for income tax purposes. Certainly, if you get paid by the homeowner, this is likely taxable income. Goods or services in exchange for your services can also be considered taxable compensation. So you'll need to learn how to treat your work as a real business.
2. Preparing Income Taxes
If you gain enough income (or income equivalents) to meet the filing threshold, your income tax returns are probably going to be more complicated than with more standard income sources. A CPA will not only prepare the necessary forms (including Schedule C) but also work with you to manage estimated payments, adjust withholding, or amend returns if necessary.
3. Crafting a Reliable Budget
House sitting can often be a cyclical or seasonal source of income. You may get paid by one owner but only get room and board from the next, for instance. Some gigs are long-lasting while others are short. Learn how to design a budget that evens out these ups and downs so you have a reliable income and don't end up running out of money before you run out of experiences.
4. Deciding If You Can Afford It
House sitting may be fun for some, but it's not for everyone. If you're trading houses or sitting solely for the chance to stay somewhere cool, you may not make much money. Can you really afford to pursue this? Could you reduce expenses even more? Are you putting away enough for the future, for emergencies, or for retirement? Let an accountant crunch the numbers so you make smart financial decisions.
5. Sorting Out Cross-Border Issues
International house sitting in other countries is the Holy Grail for many professional sitters. But this could open you up to international income and income tax rules, bank account challenges, and reporting requirements. Even moving among states subjects you to different state tax systems. Work with an experienced accountant to learn what you need to know to avoid trouble.
Where to Start
Ready to learn more about making sure this venture is a financially successful one? Begin by meeting with a CPA in your state today.