You are honest and report all of your income from your home business so you feel safe from the government right?
No matter how small your little home business is it is governed by a tangled web of local, state and federal laws. Some laws were created to protect your clients, employees, creditors and suppliers. Others are to protect you from competitors and your clients. And then there are other laws that exist just because “that’s they way it’s done.”
All you want to do is make a couple of thousand dollars a month so that you can take your babies on nice vacations without tapping into mortgage money; yet you have to untangle, decipher and interpret crazy legal laws!!
I know it sucks, right?
So in this series of Making Your Home Business Legal, I’ll give you some simple info. But you must remember I’m NOT an attorney or accountant and some laws vary from state to state. I’ll keep it general and make it painless but for goodness sake don’t live off of these blog posts! I’m a mom with 5 kids who researches info so that I can help my clients, but even they are still responsible for gathering their own information because they all come from different states.
In general, if you are a business with no employees you will need to follow some (if not all) of these steps to make your home business legal in your state.
- register your business name and get a certificate of doing business under an assumed name
- meet specific bonding or insurance regulations that your state has authorized for your type of business
- obtain required permits & licenses
- comply with zoning regulations, regulations regarding signs on your business property, licensing laws etc.
- keep accurate income & expense records
- report your income to the IRS and state tax authorities
- pay owed income taxes and self-employment tax quarterly
- collect state sales tax if you sell taxable products or services
Depending on the type of business you may have to observe noise codes and sanitation regulations.
To find out about the state and federal laws that affect your business talk to someone in the Small business Administration (SBA), the Service Corps of Retired Executives (SCORE) or Small Business Development Centers (SBDC). You can also call a college or university in your area that have small business or entrepreneurial majors.
To find out about zoning laws look in the phone book (remember those things?) under government listings or city zoning board. And of course you can always Google “city zoning laws your town“.
Tomorrow I’ll talk about the 3 forms of ownership options for your business.
Have you found it easy or difficult to keep up with your state regulations?