Work from Home Business Model
Let’s assume you are having a baby and want to start your own home business to be able to work from home. If you can keep your existing job, stop reading now as this will not apply to you. However, if you decide to start your own home business you want to a) protect your personal assets and b) use any tax deduction that eventually applies. If you just “Do Business As” or DBA you will leave many tax deduction on the table as you cannot use them. Sole Proprietorship allows to deduct some items, but certainly not as many as you could use when being a LLC or Corporation.
When I decided to start my own business I did not want to leave money on the table. I also wanted to protect my personal assets from any business liability. After some quick research I found the LLC to be the best option for me. Taxes are easy to be filed as I can just piggyback on my personal income tax return by using a plain and simple Schedule C like a sole proprietor. However, on the business side the LLC allows me to treat everything like a corporation (well, almost everything, but you will need to talk to a tax accountant anyway when things get more complicated). I can write off all my business expenses with no issues. The LLC protects my personal assets as long as I keep things separated. So, make sure to open a business checking account and to use a dedicated credit card that only carries business related charges.
Starting your own company – be it LLC or Corporation is not expensive. You can do it yourself or hire someone to do it. Sometimes hiring out this work makes perfect sense to avoid any issues. Some states allow you to do this over the Internet, while others require you to make a trip into town for that. While I went for a trip to town to register my own business, friends of mine used services like “MyNewCompany.com” to start their business. Companies like these take care of registering your business for you + offer several additional services that really save you time and avoid that a mistake cripples your business registration process.
Should you register your work from home business? In my opinion the only valid answer is “YES”. Not only offers it protection, but it also provides many financial benefits. I also think that once you have a registered business in your name, you will treat your work at home efforts with more respect and more professionalism which in return might lead to more business success. Working from home is fun and I really enjoy it.
PS: Don’t forget to claim your free Business Cards. Firsttimepregnancy.com has teamed up with Vista Print to offer you 250 free Business Cards.
Related posts: