Business license from working out of home?

[Gsrjake]

Can someone fill me in a little more on business licenses and if it's worth getting if I'm only doing it part time out of my house? I know some stuff about it but wanted some input. I am fully insured and was thinking about getting licensed next. I do plan to own my shop eventually but I do not want an LLC. Thanks

 

[Romans5.8]

Check your local laws and regulations. Some cities do not allow businesses to be run out of a home. Others do but you have to get a separate business license through the city in addition to whatever your state requires. The solution then is to find an accountant or attorney willing to make their location your "business location" for legal purposes (it's very common practice even for businesses that have a physical location. Any legal papers will go there).

Also, I would suggest looking into some form of incorporation or LLC. If you work under that umbrella they can only sue your company and it's assets, not you.

IMHO, I wouldn't exchange a single penny without insurance, a business license, knowing how to report the income and probably some sort of incorporation or LLC. Protect yourself. Don't let all the money you make and then some go to a lawsuit, some sort of damage, or even the IRS. That, IMO, is the biggest mistake small, at-home part time businesses make. They refuse to take themselves seriously and treat it like a BUSINESS instead of just a part time job. Trust me, the IRS and greedy attorneys will see it as a business.

NOT a pro detailer. But my wife does part-time commercial and real estate photography and she and I have been dealing with all of the legal stuff involved with that for a while. Sure is a whole lot easier just to do it right. If you take yourself seriously, your clients will take you seriously.

 

[BlkHemiLTD]

^^ What he said! Its different for each city I would start with your Cities home page and go from there. I know when I was looking into trying to help my brother out the city had a few forms to fill out and a PDF file that basically helped you to classify what type of business you had and from there it would show you what you might be expected to pay per year for the business. Although, detailing in the sense we talk about here didnt exactly fit into any of their categories so you will most likely have to talk to someone before you finish any paperwork at least in my experiece.

 

[Gsrjake]

Check your local laws and regulations. Some cities do not allow businesses to be run out of a home. Others do but you have to get a separate business license through the city in addition to whatever your state requires. The solution then is to find an accountant or attorney willing to make their location your "business location" for legal purposes (it's very common practice even for businesses that have a physical location. Any legal papers will go there).

Also, I would suggest looking into some form of incorporation or LLC. If you work under that umbrella they can only sue your company and it's assets, not you.

IMHO, I wouldn't exchange a single penny without insurance, a business license, knowing how to report the income and probably some sort of incorporation or LLC. Protect yourself. Don't let all the money you make and then some go to a lawsuit, some sort of damage, or even the IRS. That, IMO, is the biggest mistake small, at-home part time businesses make. They refuse to take themselves seriously and treat it like a BUSINESS instead of just a part time job. Trust me, the IRS and greedy attorneys will see it as a business.

NOT a pro detailer. But my wife does part-time commercial and real estate photography and she and I have been dealing with all of the legal stuff involved with that for a while. Sure is a whole lot easier just to do it right. If you take yourself seriously, your clients will take you seriously.

^^ What he said! Its different for each city I would start with your Cities home page and go from there. I know when I was looking into trying to help my brother out the city had a few forms to fill out and a PDF file that basically helped you to classify what type of business you had and from there it would show you what you might be expected to pay per year for the business. Although, detailing in the sense we talk about here didnt exactly fit into any of their categories so you will most likely have to talk to someone before you finish any paperwork at least in my experiece.

Thanks guys I completely agree I read up on some of it I'm gonna get in more depth with it this weekend.

 

[Pureshine]

If your doing this fully time better being legit and doing things right. So it doesn't come back to bite you in the A-s. If your having a website advertising and not legit the fines could cost you a lot.

 

[Mtnsummit]

My advice...talk with a CPA or Attorney. Like others have said you want to do it right from the beginning. The money spent on advice will be well worth it. I am a CPA and have dealt with a variety of businesses over many years. Trust me. Good advice now will save you a lot later.

Sent from my KFJWI using Tapatalk 2

 

[Pureshine]

Can someone fill me in a little more on business licenses and if it's worth getting if I'm only doing it part time out of my house? I know some stuff about it but wanted some input. I am fully insured and was thinking about getting licensed next. I do plan to own my shop eventually but I do not want an LLC. Thanks

How did you get insured not having a business license and why don't you want to be an LLC?

 

[Romans5.8]

My advice...talk with a CPA or Attorney. Like others have said you want to do it right from the beginning. The money spent on advice will be well worth it. I am a CPA and have dealt with a variety of businesses over many years. Trust me. Good advice now will save you a lot later.

Sent from my KFJWI using Tapatalk 2

+1. Consult the pros. It's gonna cost, but starting a business costs money! You wouldn't go into detailing without a DA polisher, so don't do it without finding a good CPA or Attorney!

Mtnsummit maybe you can help me; because I forgot. What's the term for when you have your accountant or attorney listed as your 'address' for your business? That's what my wife does and I can't for the life of me remember what it's called. But essentially, all legal papers go there. If she were to get sued (God forbid), the summons would go to our CPA, not our home. Having an 'at home' (Sort of, her 'full time' job is in property management and real estate so really she KIND of works out of her office but it's separate at the same time with the part-time photography thing) business, keeps it all separate AND allows us to move without having to worry about it. It's driving me nuts because I can't remember the term for that; but it's probably what the OP should look into. For us it also helps us avoid our cities hefty additional fee for working out of the home AND our cities business license. Since no client ever comes to our home or any physical location, there's no need. And the business is, legally, located at our CPA's office. Or something like that. I dunno. However the CPA has it worked out!

 

[Scott@IncrediblyDetailed]

Make sure your property is zoned properly.

 

[cardaddy]

Great info so far.

Just be sure BEFORE you go all happy into your local city or county office telling them who you are and WHERE you are that you ask the questions WITHOUT telling anyone that information. Heck, as for a friend, or an in-law even but NOT for yourself. At least not until you know the answers.

If you do, you can bet the local zoning enforcement guy will be heading by your house bright and early.

I think the term is "Registered Agent" that Romans was looking for where your attorney or cpa is the 'face' of your business. Keep in mind though that THEY WILL CHARGE you for it. Best if you're doing sole proprietorship that you take EVERYTHING out of your name and put it in your wife's. Put cars, trucks, house, everything in her name (or if you're young and it's your parents house THEY need to be consulting someone about the matter.)

Write your paychecks from the business as 'personal draws' and don't leave extra money sitting in the business account. One way I've seen it done is if you need money, put it in from your personal account (like to buy supplies when there isn't enough in there, or equipment that is a cash asset. That is an investment in the business and a tax write off.


Then be insured deep enough to cover any and all boo-boo's that could happen.

Someone decides to come after you they can only get what you own. Don't own anything and they don't get anything. When I only had 1 commercial truck way back in the beginning I did it that way. Figured if I had a wreck and hurt someone, (and it was over a million in damages) then they could come after the business if they wanted, being as after the wreck it only owned a wrecked truck at that time.

It being another step removed to be a LLC? Well yeah! Is it always worth it? I'd say it really depends on just how much cash flow you have, what your profits are, and what type of cars are your target market. The business as a corporation ALWAYS pays taxes (based on business profit of course). And when writing yourself a paycheck, you ALWAYS have to take appropriate state, federal, SS, and whatever other taxes out of it. It's a royal PITA.

Finally, if you DO go that route, invest in QuickBooks and build your database in it. You'll spend a bazillion hours at first stetting it up, but afterwards you can get by with just a few hours a week. Quicken *can* work, but only if you get the small business edition. Even then, you'll have to assign not only what is taxable, or not, but what form you need to use for it. (QuickBooks tends to know that part at least.) Although Quicken is plenty capable of doing the job, just does it a bit differently. Just depends on how you want to handle it. rops:

 

[Romans5.8]

Registered Agent! Yes, that's it!

They will charge you, yes, but it is one more step in protecting yourself.

As others said, protect your assets too. Either the form of an LLC, or, simply not owning anything.

You could also do that "inversely" where your wife owns the business, you are the employee, and you own all of your personal assets. There are incentives now and then for female business owners. My uncle bought the company he worked for for 30 years when they went under, but they did it that way and apparently saved big bucks.

The one piece of advice I've always heard too in regards to taxes, is to always spend money and don't let it sit in the business account. Take it as income, save it in your personal savings, and then buy (deductible!) supplies for the business out of your "personal" account. Though chances are there will also be a threshold of the business buying its own supplies that will be beneficial as well. Something else to talk to your CPA about. There are also tax benefits for business that SPEND money.

Business taxes are just an endless and silly game of shuffling money around, best described in the old joke;

A wealthy businessman comes in to town to collect on a debt. As it turns out, the barber owes him $100. The town is a long way from home and he's looking for a room. The owner of the local bed and breakfast charges $100 for the night. The businessman is gonna lose his debt; but it's the principle of the thing! So the businessman pays the $100. The bed and breakfast owner then quickly runs to the handyman to give him the $100- because he owed him for repairs. The handyman owed the banker, so he gave the banker the $100 bill. But the banker, so engrossed in other peoples debts, still hadn't paid the barber the $100 he owed him for cutting his hair and giving him a shave every week. The barber gladly takes the $100 bill, and runs to the businessman in his hotel room and gives him the $100 bill.

. Money is a funny thing.