FAQ: Home-based Businesses

Home-based businesses have seen a recent explosion, as employees left the general workforce to carve out their destinies. This exodus, dubbed The Great Resignation, occurred primarily as a result of the COVID-19 pandemic. But now, as businesses are asking employees to come back to the office, even more people are considering the work-from-home life longterm. If you are a new work-at-home business owner, or thinking about it, check out these common FAQs I get asked regularly. ???

Q: Can I start a home-based business without a business license?

A: Yes, if you are a sole proprietor.?

If you are serious about starting a new business, make it legal. A sole proprietorship doesn’t usually need to register with the state (unlike corporations, partnerships, and LLCs ), but be sure you check with your state to see what’s required for specific professions (e.g., CPAs, RNs, barbers).

Q: Do I have to develop a business plan?

A: It is not a requirement, but you should still write one.

Start with a business plan if you want your new business to succeed. Creating a business plan increases your chances of success by 30% or more!?

Q: Will I need insurance coverage to operate a business out of my home?

A: Even a home-based business needs some form of insurance.?

Homeowner’s or renter’s insurance is designed for residential purposes, but you can choose to purchase additional coverage to secure a home-based business. This will protect your personal assets from being subject to any lawsuits.

Q: Will a home-based business affect the way I file my taxes?

A: Yes, you will need to file additional forms to report your business income and deductions.

The good news is, working from home allows you to deduct a portion of your household expenses, such as your office space and energy use. You can also write off expenses for equipment, postage, and advertising to reduce the amount of taxable income on your tax return, but be sure to keep records of these purchases. It is best to consult a tax professional to ensure you file everything correctly.

Working from home has many advantages. Taking control of your business (and your income) and dispensing with a daily commute are just some of the benefits. With the proper commitment, you’ll be on your way to building a solid income from the comfort of your own private space.??

If you are interested in learning more work-from-home business tips, contact ?AdvancingWithUs.?

Published by:

Alan Pariser?

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