William Penn Life, 2000 (35. évfolyam, 1-12. szám)
2000-10-01 / 10. szám
Pitfalls to avoid with your home business Earn extra interest on your WPA annuity Between September I and December 31, 2000, all WPA annuity contracts will earn 6'A% interest. That’s a bonus of 1/4 % for the last four months of the year. If you don’t already own a WPA annuity, you can still take advantage of this end-of-theyear bonus rate. Call your WPA representative or our Home Office toll-free at 1-800-848-7366 and sign up for a WPA annuity TODAY. from CPA Client Bulletin If you have a home-based business or are thinking of starting one, don't fall into the trap of taking your business lightly because of its location. Whether your office is located in the den of your home or in a building downtown, you still need to consider how state and local ordinances and zoning laws will affect it. In addition, you'll need insurance and an adequate legal and financial structure for your business. LOCAL ZONING LAWS Most communities have zoning laws that restrict where businesses can be located. Although some communities have updated their zoning laws to allow home-based businesses, others have not. You need to check with your local zoning board or town hall and look into the applicable requirements. Most are not too difficult to comply with and, depending on the type of business, may not affect you at all. Note though, that some communities see this home-business trend as a revenue-raiser and may require you to pay a special fee or tax. Also, if your community finds out you are in violation of zoning laws, you could incur fines and penalties. LOCAL BUILDING CODES Even a small business needs to make sure that its "building," in this case a home, complies with local building codes. Check that you comply with the local codes for areas that customers will be using. If your business requires heavy use of computer and technical equipment, make sure your electrical system can handle it. Have a professional check your system. Remember: a new piece of equipment or home appliance can easily strain a near-capacity system. INSURANCE COVERAGE Insurance is a key element to protecting you and your fledgling business and could make or break your business should some mishap occur. Homeowner's insurance generally does not cover business property. A home-based business will need separate coverage for loss or damage to business equipment or inventory, or if a client is injured while visiting your home. Luckily, insurance does not have to be complicated or costly. Often, adding a simple rider to your existing homeowner's policy is sufficient. Check with your insurance agent. LEGAL S1RUCTURE Most of the time, a home-based business starts off very casually-as an outgrowth of a hobby, for example. If you want to keep it informal and low-key, that's fine. But if you want your business to grow into something significant, then you should consider giving your business a formal legal structure. The legal structure can take a variety of forms, such as a sole proprietorship, a partnership, a corporation or a limited liability company. Your choice will depend on factors like taxes, number of employees and personal liability. Contact an attorney to find out what structure would be best for your business. FINANCIAL SÍRUCTURE The financial structure of a new homebased business—that is, how the books and accounts are set up, how the business will be financed over time, etc.-is often not the first consideration. But paying careful attention to such details from the outset can help you avoid many headaches on your road to success. A CPA can help you review such financial matters, advise you on tax questions, and assist you in setting up your books and accounts correctly. They can also help you avoid the problems that can come with using off-the-shelf accounting software. |\yj>|J Copyright (c) 2000, American Institute of Certified Public Accountants, Inc., Jersey City, N.J. 4 Wiliam Pena Life. October 2000
