Estimates by the U.S. Bureau of Labor Statistics in 2010 show that more than 18 million businesses are run primarily out of a home. Given recent advances in mobile and wireless technology, as well as the cost-cutting realities of a low-growth economy, that number may be even higher. If you’re considering running a home business, there are a number of things you’ll want to consider.
Operating a Home Business
First, make sure your home business meets zoning regulations and that any required licenses or permits are obtained. Many municipalities and condominiums restrict home business activities. If customers will come to your home, you may need to consider parking, disability access and display of advertising. You may also need to amend your homeowner’s insurance policy to cover commercial activities.
The IRS may allow you to deduct certain expenses — such as phone, internet hookup, a portion of your rent or mortgage — based on the percentage of space in your home that the office occupies. To qualify, the home office must be used exclusively for business; a guest room or other shared space will not qualify. The key to claiming any of these deductions is to prove that they are necessary for and confined to business use.
Finally, you should also consider how the arrangement will impact your family. Will there be tension if you’re home all day? Will your work presence cramp your family’s daily activities? How will they interact with clients or employees? Make sure to give this issue serious thought and discuss it with your family.