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Article:
Home Business Legalities And Tax Advantages by: Dean Phillips Even if you work out of your home, most cities and/or counties require you to have a business license and/or permit. Check with your local government municipalities to find out what the requirements are for where you live. Depending on where you live, you should be able to get this information from your local courthouse or townhall. Zoning may also be an issue. Municipal ordinances can be very restrictive about what types of businesses are allowed in a residential district. This also applies if you plan on placing a sign outside of your home. Again, check with your local government municipalities to find out what the requirements are for where you live. In addition, depending on how your home business is structured--as a sole proprietorship, partnership or corporation--there may be forms to file with the state. The legal structure affects taxes and the liability of the owner and the home business, so it's important to follow the appropriate procedures. Contact your state's Department of Revenue for filing fees and information. If you plan to operate your home business under a name other than your own, you will have to register a fictitious name with the county--usually referred to as a DBA filing (Doing Business As). The exceptions to this regulation are corporations and partnerships doing business under the umbrella of the corporate or partnership name. As a home business owner, you may be required to file estimated tax returns and pay estimated taxes quarterly. If you have employees, you also have to submit taxes withheld from employee paychecks. Here are some of the taxes you may be responsible for: Employment taxes -- Federal income taxes, Social Security and Medicare, federal unemployment and state income taxes. Federal self-employment tax--Required by those who work for themselves to cover Social Security and Medicare contributions. Sales tax--Each state requires a sales tax number for any company involved in selling tangible items. Sales tax is collected, reported and paid to the state either monthly or quarterly. Unemployment insurance tax -- You are required to pay federal and state unemployment taxes if you have more than one employee on the books for at least 20 weeks in a calendar year, or if they have paid more than $'1
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