I am unclear on how to set up for business.If I use my house as a home office,the township wants me to apply for a zoning permit and fill out an in-home occupation questionaire.

I don't see much point in paying $75.00 for a zoning permit,since all I would be doing is setting up appointments,maybe working on an action,and sending parts out for duplication or specialty work.

I've already gotten a two opinions on this issue,but I'd like to hear from many of you who have been working out of your homes for years.

Generally, if you have customers coming to you house, then most cities will need the zoning permit. That is because a residential area isn't geared to having a large amount of traffic into and out of peoples houses. Either people traffic or a lot of deliveries (this can be seen as an eyesore by some residents). So the purpose of the zoning permit is to have some control over this non-residential traffic.

But if there is nothing visible from outside that you are running a home business, then the permit may not be required (such as a consultant that does everything online).

In general, what the city says you need, you need. You might be able to get away without paying for a while, but the law was recently changed to allow various tax agencies to share information with one another. So if you claim your income on your income taxes, the city may come after you. If you do not, then the feds may come after you. Not to mention that you will not be able to document your income if you ever need a loan, like if you decide to buy a house.

So do not ask us. Ask your city's business tax office.

I agree, better to do the right thing, than get caught. You may need a business license as well.

I agree too, to a point. But, why raise the question? Believe me, there are MANY people in your neighborhood who have basement shops, telemarketing careers, or musicians booking gigs from their phones. They aren't required to have permits to do that, and neither should you be (unless you're going to have a shop/store, spray lacquer, or lots of foot traffic)

Like most tuners, I'm probably sporting a healthy non-conformist streak. I've had my rebuilding shop next to my country home, where the zoning regulation is clearly legally unenforcable (I had it looked at by my lawyer). Most of the zoning ordinances are written by the same committ that designed the camel while trying for a horse.

You will doubtless encounter some in the township who may try to get you to seek some kind of permit, but most ordinances (in our area anyway) permit music instruction, and other light foot traffic home businesses like CPA or even attorneys. The actual wording of the zoning ordinance may not permit it per se, but any first year lawyer will back them down if they try to get you to get a permit for having a desk, a phone, some friends who visit and a bag of tools.

Its about free association, and reasonable use. If it were me, I'd do all the right things with the IRS, the Business Tax folks, and keep great books. The rest I'd ignore.

It has been posited in legal circles that the vast majority of zoning ordinances would not pass constitutional muster if challenged and taken to the high courts. But, if you're looking for harmony, I'd proceed and keep a low profile and avoid too much by way of signs, etc. If its invisible, they can't know what you're doing, and less is more when it comes to this kind of thing.

As mentioned above, you WILL need to obtain a business license from your county, and again, I'd just explain that piano service is not occuring on the premises. You'll win this if you present it correctly (your office is in your car and travels with you) Nobody should be required to obtain any license to be in their home and on the phone.

If it gets hot, my money is on a good lawyer who can give you a clearer read, but don't be cowed by local tin plated dictators who insist on knowing everything that happens in your house.

My township likes me. They know I'm on good solid legal ground, and they know I know it. Good fences make good neighbors, and that goes for firewalls between zoning and the inside of your home.

FWIW RPD

The upshot of what I am saying is this: You are not setting up a commercial venture, you are living in your house. If you ask about a commercial venture, you will be directed to seek approval. I'd stop asking if all you're going to do is have a single bench thing with a phone and a computer. Nobody can stop you from doing that in your house, and if the locals try, your lawyer can probably push back so hard they'll be in the middle of the lake.

RPD

How much will you have to pay a lawyer to avoid paying a $75 permit fee? $200?

If you get a business license, you will need to give a physical address, and you will probably have to show that you have clearance to use that address for your business.

But you should not ask us. You can either ask whoever does the business licensing, or you can pay a lawyer to tell you the same thing.

Thanks for your answers.

I know this isn't the place to ask about legal issues,but my biggest thing was,do I really need a home office for this line of work?

You may be able to cut many corners in your business, but then what does that say about your business? That you cut corners! Many towns have some sort of Commerce Club that may be able to give you answers. Business expenses can go both ways, too. For instance if you have to pay more in fees because part of your house is used for business, you may also be able to deduct part of your mortgage as an expense. But don’t forget to have your fire insurance policy updated!

I'm not suggesting doing anything wrong at all, or cutting corners...an attorney WILL cost more, and by consulting one you will be able to get the whole picture...in all respect to those above, I'm just saying that once you lay all your aspirations at the feet of a city or township committee, you may find there are many misunderstandings you will need to rebut, and probably some unintended consequences.

(if the city requires inspection of the premises on a regular basis, will you welcome them into your home without objection?)

I hope I am wrong, for your ease of mind's sake, if you decide to obtain a business license for your desk and phone. Please keep us informed as to how it goes.

And, by all means obtain the license if you feel comfortable with it. Just be prepared (in some jurisdictions) for a host of other issues, like tax on your tools and fixturing, OSHA inquiries as to employees/health conditions at your business, and possibly even legal notice to the neighbors for their input if you are seeking a zoning variance (to which they can say "no" and then you're getting the lawyer anyway)

I still stand by my advice. If an attorney cost even 10 times more than complying with a zoning license, you should obtain legal advice before representing yourself to any formal body. Its your career, and the stakes are substantial.

Best of luck, RPD

You need a place of business. That has its requirements. You can probably go to your locality's website which will explain exactly what you need.

If you want more information, there is a book Small Time Operator from 10 Speed Press that can help you. There are undoubtedly other such books. Ask at the library, one of the many fine institutions supported by your taxes and fees.

Here in Canada if I would like a home office I can and have one. All that is required from the city is a business liscence of a certain classification.

But for the shop, it is a different story. That is a commercial venture. Now some times I do bring “homework” to the house in the form of an action or a key set or a broken bench to repair. I don’t run down to the city and ask them if this is ok.

But you do need a place to hold your records and arrange your business, an office of some sort.

I'm just setting my Business up too. I was told at one time that I wouldn't need a license or a tax id. This morning one of the county commish guys told me that I'd need:

state contractors license, then fill out a work comp exemption form...

I wrote him back and asked WHY? No answer as of now.

I've got to do some more checking.

scooter

In the city of San Jose, California, one is required to have a license before starting a business, home or otherwise. If the license is not procured first, a fine is levied.

After I moved to San Jose from Santa Clara (no license required there), I was told by a friend that I'd better get my license, or they WILL find me and the fine will be substantial. So I applied as soon as I discovered that it was necessary to have this to do business here. I had less than 2 months lag time between moving in and applying for the license, but I still had to pay a small fine.

Here the cost is $175.00.

One reason to have a home office is that it enables you to deduct all of the miles you drive. This is if you take the mileage deduction for your auto. In this business, the car deduction is one of the main ones we have.

As I understand it, if you have a home office, that is your place of business. So, you can deduct the miles you drive to your first appointment. Then the miles between appointments. Then the drive home.

Without the home office, the first and last drive of the day are considered commuting miles, and are not deductable. Only the miles between your first and last stops would count.

I am not a tax expert, so don't take my word for it!

Speaking of vehicle write-offs, what about parking tickets incurred in the line of duty...? Are they tax deductible? Just got my first ever today. The old "no parking" sign hidden behind a tree trick.

Dave, if it was really hidden, take a picture of it-with a date stamp or paper-and fight it. We had a local spot where I knew the stop sign was, but there was a big tree branch blocking the view of the stop sign. This was on a main side street with a squad car sitting about four houses up the cross street. Next day the tree was trimmed...

Wife does medical transcription from home... vehicle mileage is a BIG ONE...

You guys raise an interesting point on the mileage, to and from a home office. I'm sure there are tests within the IRS code someplace to establish legitimate office use, what qualifies etc.

I think that issue alone would probably cause me to consult my CPA. What I have discovered here in Michigan (in my area where its rural) is that there is sometimes a bit of a disconnect between what makes sense, and what is practiced on a local level. For instance, IRS regulations allow deductions from a home office, but do not appear to stipulate (as far as I know) any local licensure or permits in order to use that deduction. That wouldn't invalidate your local zoning ordinance, of cours, but it does suggest on its face that all people have the right to establish a home office if they follow IRS guidelines. Where I get feisty with local ordinances is where there is some effort to remove, or limit, what Federal law allows.

Just musing here; some years ago certain jurisdictions tried to outlaw Federally approved (HUD) mobile homes in certain subdivisions. They were swatted down on a challenge to a higher court, and now those jurisdictions have developed minimal width or square footage requirements in an attempt to circumvent the effect of the court's decision, but at my last read there is little to nothing developers can do to eliminate double wide Federally approved houses.

If you take my more "leave me alone" approach, you may need to dance between the raindrops, so to speak, to find the right combination of diplomacy and legal focus. But, if your sense is it'll be better and ultimately easier to just comply, then failing all else you COULD just pony up the $$ and get the permit. Whatever makes you most comfortable I suppose.

RPD

David,
Call your county courthouse and ask how much it costs for a DBA registration if you're in biz as a mere individual. It might cost $10. To open a biz checking acct, you will need to establish a professional biz standing in your area. The courthouse DBA registration is one way to do that.

Apply for sales tax permit with your state (free) so if you sell polish, etc. to your tuning customers as an extra profit center to your business.

Join your Chamber of Commerce and get your name out there. I would wish you good luck, but I've not gotten anywhere with luck. Strategize your marketing plan and study your advertising as to not waste ad dollars on over-promissing newspaper sales people.

Expect 3-5 years to grow your business consistently. I sincerely wish you the best.

I agree with the DBA thing. I've done that. Plus, nobody else can legally use any part of my name in their business now either as I own it.

My accountant told me that whatever I deduct throughout the years as office space; 1. Puts up a red flag for the IRS. (no thanks) 2. When it comes to selling the house, you have to pay, I forget how much of it back from the sale of your home but, it was a lot! So, for I believe it was, 2 years, or something like that, (this was 15 years ago) before we sold, I stopped taking my office as a deduction. After that point, I was able to legally sell the home with no tax consequences.

Yeah...its a little bit necessary to just get some analysis on your tax situation...

I'll "third" the advocacy for the DBA...it costs little and its both required and helpful.

Jerry makes a good poing in favor of not taking the deduction for just a small home office, red flags etc...I take it though because our expenses are high here... we have a shop here too, plus a fairly large office...but yeah, with the payback its curtains for me if we sell LOL.

RPD