Starting a Small Business: A Good Idea?
John McCoy
They’re available, either in person on line, to help you with getting ready, setting up a business plan, advertising and any other phase of business (http://www.score.org/index.html).
Some cities, San Antonio, for example, have programs and offices intended to help entrepreneurs get started. They’ll help you get a license if needed and may even make you a good deal on business space.
You have to be careful with taxes. Check with your tax preparer regarding what you can and cannot deduct. For example, I don’t believe you can deduct the portion of household expenses accounted for by your home office if you eat, watch TV, play computer games or anything else not connected with your business in that space.
You probably can, however, deduct the expense of a dedicated phone line or something like a PC card for your laptop when you can send material to news media from your car. Leasing, as long as the vehicle is used exclusively in your business, may be deductible.
If you use your own vehicle, you can generally deduct related expenses but you need to determine the method. I use the mileage method. My newspaper pays me $.35 per mile for trips relating to news stories and photos. The IRS allows a higher amount and your tax preparer can help you get credit for the rest. One of the good things about mileage is that you only have to keep an accurate log of the miles you actually travel on your job.
You need to confirm this with your tax preparer, but sales taxes are kind of interesting. Sales taxes are only paid by the final purchaser. That means that YOU don’t pay sales tax on anything you resell. You do pay sales taxes on anything which YOU use in your business.
Should you work at home or get an office elsewhere? There are many reasons to do either but here are some in favor of an outside office: no question about tax deductions, availability of equipment you might not have at home at no “extra” expense, being able to interact with others and also business opportunities you might not otherwise encounter.
Networking is also important. I’m just learning about LinkedIn, Twitter, Face Book, just to name a few. You can not only meet new people, you can discuss ideas and you might even get some business.
I’m running out of things to say in this article so I’ll end with: Good luck and good fortune to us all.
Office Where? Home or Away From Home
Should I work at home or get an office outside my home? This is a question people who prefer not to work at regular jobs often ask. I don’t have an ironclad answer but:
Check with your tax preparer. I believe the IRS requires you to use your “home office” strictly for work otherwise you can’t make any deductions. I don’t think you can even eat there, watch TV or play computer games.
If your office does qualify, I believe you can deduct the portion of your home expenses relating to your office space. That involves math which is beyond me, but basically, that means that you may be able to deduct expenses for the percentage of utilities and other expenses accounted for by your office space.
You also can usually deduct the cost of a phone line or other expense directly related to your business. Again, check with your tax preparer. You don’t want to make any mistakes.
It's possible that your rent for the office of will be a legitimate business expense. Will there be other office equipment available -- fax machines or the like -- anything you don't have available in your home?
Having other adults to talk with may also be an advantage and as one of the other answers put it, there's also the possibility that you might get some business you wouldn't have otherwise. I work out of my home but take my laptop, pc card and camera with me so I do get some business expenses out of the deal.
I can, and actually have, sent photos to news media from my car. I didn’t get paid for it, though. It was an accident and they didn't use it because it wasn't serious and no deaths were involved.”
Your decision requires a lot of thought and getting information from knowledgeable people, including the IRS and the Small Business Administration. Your city might also have programs relating to being an entrepreneur. I lived in one and one of the “perks” was that they helped with licensing, if needed, and would even make you a deal on office space.
You might also check with the Senior Citizens Organization of Retired Executives (SCORE) for some additional ideas. You can access them on the Internet and get a mentor who may be many miles away from you.
SCORE members have literally “been there” and “done that.” There’s very little in the way of business that some one of them hasn’t done.
Good luck.