Before jumping into a home business, you should consider a few areas. You may decide that the areas don't apply to you and that is great. The more areas you have to cover, the more it will cost. In that, just be informed on the topics to research before you get started. A little work now may pay you big dividends later if you avoid a legal or tax liability.
A call to the county should be your first step. Usually you will find the licensing division at the courthouse. Even though you are only starting a home business versus a brick and mortar business, you will most likely need a business license. Work hours, size of business signs, and delivery routes will be covered among many other regulations.
Depending on what you choose to do, you might consider getting a tax id number for your business. If you are a sole proprietor you may run under your own name and use your social security number for filing your taxes. The only thing to remember here is that you will have no corporate protection from legal issues. If you have a large exposure, I would recommend setting up an LLC.
If after you have chosen to organize in the form of an LLC and have received you new tax id number, you will need to call your Secretary of State office and fill out the appropriate application.
Lastly, you will need to set up a bank account in your business name. You will have to have all of your corporate documents back and present them to the bank to get set up. Again, if you are running under your own social security number you may use your personal account.
Do your best not to co-mingle your funds. Even if you are a sole proprietor, you will want to pay real close attention to how you manage your business expenses. You do not want any grey areas when it comes tax time. Even if you don't end up opening a business checking account, it is advised to open a separate business account to keep it all in the correct order. Your accountant will love you later.
Many home business owners never have to hire employees. But if you do, make sure that you become familiar with payroll and payroll taxes. The very best advice is to hire a payroll company to process your payroll and handle all of your taxes. It isn't that expensive and they will keep you out of hot water with the state tax collectors.
Ah, workers compensation. Workers compensation is a benefit to employees if they are injured on the job. For some states, if your business has less than three employees, you don't even have to carry workers compensation. When you discuss insurance with your insurance professional, ask him or her about workers compensations.
This article was written from experience and will hopefully point you in the right direction so you avoid pitfalls. Do not consider these tips to be legal advice. It was in no way written to be a substitute for your own legal due diligence. Make sure that you seek legal counsel and a tax professional before starting your business. Laws are different from state to state and even in differing business environments.
A call to the county should be your first step. Usually you will find the licensing division at the courthouse. Even though you are only starting a home business versus a brick and mortar business, you will most likely need a business license. Work hours, size of business signs, and delivery routes will be covered among many other regulations.
Depending on what you choose to do, you might consider getting a tax id number for your business. If you are a sole proprietor you may run under your own name and use your social security number for filing your taxes. The only thing to remember here is that you will have no corporate protection from legal issues. If you have a large exposure, I would recommend setting up an LLC.
If after you have chosen to organize in the form of an LLC and have received you new tax id number, you will need to call your Secretary of State office and fill out the appropriate application.
Lastly, you will need to set up a bank account in your business name. You will have to have all of your corporate documents back and present them to the bank to get set up. Again, if you are running under your own social security number you may use your personal account.
Do your best not to co-mingle your funds. Even if you are a sole proprietor, you will want to pay real close attention to how you manage your business expenses. You do not want any grey areas when it comes tax time. Even if you don't end up opening a business checking account, it is advised to open a separate business account to keep it all in the correct order. Your accountant will love you later.
Many home business owners never have to hire employees. But if you do, make sure that you become familiar with payroll and payroll taxes. The very best advice is to hire a payroll company to process your payroll and handle all of your taxes. It isn't that expensive and they will keep you out of hot water with the state tax collectors.
Ah, workers compensation. Workers compensation is a benefit to employees if they are injured on the job. For some states, if your business has less than three employees, you don't even have to carry workers compensation. When you discuss insurance with your insurance professional, ask him or her about workers compensations.
This article was written from experience and will hopefully point you in the right direction so you avoid pitfalls. Do not consider these tips to be legal advice. It was in no way written to be a substitute for your own legal due diligence. Make sure that you seek legal counsel and a tax professional before starting your business. Laws are different from state to state and even in differing business environments.
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