If you’re thinking of starting your business from home, you’re not alone. In fact, 69 percent of entrepreneurs do so, according to the latest Global Entrepreneurship Monitor report. However, if you’re not running your home-based business in line with the laws, your business could be shut down before you get it off the ground. Some things to know:
1. Laws regulating home-based businesses vary from state to state and even from city to city. Check with your city’s business development office to determine whether your neighborhood is zoned for home-based businesses and what restrictions apply.
2. Zoning codes usually restrict obvious additions to the exterior of your home, such as signage, displays and exterior physical changes to the home for the purposes of conducting business. Traffic restrictions include the numbers of visitors to a home-based enterprise and may prohibit having employees in your home. There are usually noise, odor and use of hazardous materials restrictions as well.
3. As far as tax deductions, if you use part of your home for business, there’s good news. For taxable years starting on or after Jan. 1, 2013, taxpayers can multiply a prescribed rate by the allowable square footage of your home office (instead of having to determine actual expenses). Check with your accountant for more information.