subject: Home Business Opportunities : Make Sure You Check Out These Tips [print this page] 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.
You may find yourself in a "chicken before the egg" scenario but you should go in this order: Tax id number first, form your company and then open a business checking account. Once you have the tax id number, you should be able to go down to the Secretary of States Office to form your company. Make sure you take your new tax id number and documents from the state to open your bank account. They will want to make copies of all your company documents.
Even if you do decide to become a sole proprietor, it is recommended to keep your business finances separate from your personal finances. When it comes tax time, your finances will not be so co-mingled that your accountant can't balance your books.
Another area to consider is whether or not you are going to need employees. Unless you are a pro at doing payroll and keeping up with taxes, it may pay you later to hire a payroll service. They do charge a fee but you will deem it well worth it when you run out of time to file quarterly tax payments and other requirements. You certainly do not want to get off on the wrong foot with this one.
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.
by: Danny Spetuzza
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