How to Run a Business From Home Legally: A Guide

Posted by Casandra Properties on Tuesday, August 25th, 2020 at 3:21pm.

There are around 15 million home-based businesses

There are so many home-based businesses because people enjoy working from home instead of at an office. They enjoy being their own boss. They also enjoy spending more time with family at home. 

But with any home-based business, it's important to understand the legal ramifications. It's important to understand how to run a business from home legally. 

If you don't understand the legality of running a home-based business, it could cost you your business license, tax fees, and other problems. 

Here's the complete guide on how to run a business legally from home. 

Work From Home Business

Getting a Business License

One of the first steps with any business is to obtain a business license. Without a business license, you can't advertise or sell your products in your city or state. If you do, you could face extensive fines. 

First, you need to file your business name in your city. You will need to go to your local city hall and apply for a business license with your business name. It may take a couple of days to process. 

You should also be aware of what you can and cannot sell from your home. If you are planning on selling food or liqueur from your home, you will need to obtain more than a business license. 

You will also need to obtain a liqueur license as well as get a food permit from your local healthy county. 

Understand Taxes

Another critical part of opening a home-based business is understanding the taxes. 

You will need to figure out what is tax-deductible and what isn't tax-deductible. You will need to consider if your home is a tax write-off or just a specific room you use for your office. 

You should also consider the miles you drive. If you are driving to business meetings, those miles, and the gas you purchase could be a tax write-off. 

Other tax write-offs will be business expenses. That may include business software you purchase. In addition to tax write-offs, you will also need to calculate taxes. You may consider getting QuickBooks, which can help you calculate your taxes. 

Having a home-based business also means you will have to pay quarterly taxes. You will have to set some aside each quarter, depending on how much you earned. 

Check Business Insurance

Starting a home-based business means you may also need business insurance. 

You should consider getting general insurance to protect you from any lawsuits from clients. This protects your business if a client claims your product injured them. 

Other kinds of home insurance to consider is health insurance. While you don't need health insurance for your business, you will need to figure out what kind of health insurance to get for yourself and your family since you are an independent business. 

You can't get health insurance from a company since you own your business. You have to get one yourself. 

What Are the Zoning Laws?

Another consideration when starting a home-based business is the zoning laws. 

For example, you should check with your home owner's association to ensure that you can legally have a home-based business. 

If your business has a lot of traffic coming to your home, it can violate zoning laws. That's why it's important to see if your local zoning laws prohibit any amount of traffic that could be of disturbance to your neighbors. 

Some cities just want to ensure that your business is complying with local laws and that you're not running a doctor's office or something that isn't compliant with the local laws. 

Is It Safe? 

Another legality issue if you have a business from home is ensuring that it is safe. 

If you are a carpenter and shelves, desks, and other workshop projects, you will need to makes sure your workspace is safe. You will need to see if you need essential fire services in your workplace in case of a fire or another potential disaster. 

You will also need to ensure you comply with any safety laws in your state and the local area. That may mean having a fire exit, a fire alarm, a carbon monoxide detector, and other safety measurements in your workplace. 

Other Considerations with a Home-Based Business

When starting any business, you need to consider how you are going to run a business, specifically how you work with clients. 

Part of protecting your business is ensuring that you have contracts or business legal documents written up that protect your business from being sued. This is different from insurance because it's about a legal document that protects you from losing your business. 

You should have legal contracts or legal notices created to warn your customers of anything that could happen to the product. 

For example, if you ship your product to customers around the United States, you should have a notice that customers sign that states you are not responsible for what happens to the product after it ships. This is just one example of how you can protect your business legally. 

Now You Know How to Run a Business From Home Legally

Starting a home business can offer a lot of benefits. You can spend more time with your family and choose your working hours. But having a business means you also have to be mindful of the taxes and the legality of working at home.

Abiding by legal laws will protect your business from tax fees. It will also protect it from lawsuits and any other issues that can harm or potentially cost your business. All of this information is vital to learning how to run a business from home legally. 

If you liked this article, you can check out more like it by visiting our website. 

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