Guide To Owning A Home Business
A home business is classified as a business that is operated from the home or residence of an individual. Home businesses vary from full-time to part-time operations and are specific in nature due to the fact that the individual’s home acts as both ad-hoc office building and residence. There are a multitude of factors involved in the establishment and maintenance of a home business, including legality, solvency, application, and functionality.
Home Business vs. Small Business
By traditional definition, a home business can be classified as a small business, but not all small businesses are necessarily home businesses; simply put, a small business being run out of an individual’s home or residence is the most traditional type of home business.
Reasons for Starting a Home Business
There are many reasons for the desire to establish a home business that exist both outside and within the parameters of business endeavors and commercial opportunity. The following are some benefits of starting a home business:
1. Tax Deductions: Within the establishment of a home business, many expenses that are shared by traditional residential life and the operations of a home business have the potential to be shared. As a result, many of these expenses retain the prospect of tax write-off and deductions, such as:
A car used for business purposes
Utilities used for business purposes
Supplies used for business purposes
2. Expenses: By establishing an office in one’s home, added real estate expenses, such as renting and leasing, can be avoided. In the event that an individual wishes to establish a start-up business in the form of a home business, a home business endeavor is a legitimate barometer to gauge the needs of the business when or if the size of the business outgrows the home business setting.
3. Convenience: Many home business owners are also new parents or stay-at-home spouses, which allows them to administer business responsibilities in tandem with household and/or parental duties. Due to recent advances in technology, a host of business practices can be conducted online – or remotely – and as a result, can be completed in a home business setting.
Home Business Legality
The parameters and protocols surrounding both the establishment and maintenance of a home business vary on an individual basis and in conjunction with the established legality, taxation, and operations of business law and legislation; all home business documentation should be completed to the fullest extent - in a meticulous fashion. In the event that an individual experiences difficulty completing – or understanding – the requirements of establishing a home business, they are encouraged to consult an attorney specializing in employment, business, and labor law.
It is important to mention that tax write-offs and deductions with regard to home businesses must adhere to all legal parameters; if the application of business legality with respect to taxation is not adhered to in a fashion that satisfies legal business practices, there exists the prospect for severe legal ramifications. An attorney should be consulted prior to the establishment of any business endeavor in the event that an individual is not well-versed in business law practice.