I want to become self-employed and work from home

[new]

Hi,

I recently moved to US, from Canada and I would like to become self-employed. I would like to work from my home computer as a web developer and I have some questions about this.

1. In my lease agreement it states that I am not allowed to run a business from my apartment. As a freelancer working from home for international clients and not having business meetings in the apartment, would this be an issue? Do I have to change the lease agreement?

2. I'm in US on J2 visa(I do have a working permit) and this visa states that I am not allowed to support my spouse. Would working from the apartment she leases be an issue? (I don't think I am allowed to pay for rent or put this as an expense on my tax return)

3. Do I need anything else than a EIN number to start this? Do I have to get the number before I start or can I do it at the end of the year, before tax forms are submitted?

4. Somewhat related - I also have the option to work from home in US for a Canadian company as full-time employee. Is this better than being self-employed? Let's say job security/money are not an issue.

5. Any recommandations for an office(in case I have to use one)? Maybe something governmental, or something that helps small business to grow.

Thank you, and please ignore any of my grammar mistakes as english is not my first language.

[Wozcreative]

To answer some of your questions:

1. I had the same thing.. usually if you do it well, the landlord wouldn't find out. Don't publish your address on any of your marketing material, and don't meet anyone at your place, go to a coffee shop. There are a number of reasons why you aren't technically allowed to run a business and it's due to insurance purposes, as well as, some people run illegal businesses, and if your house gets raided, the landlord needs to own up to being responsible (or partly). I would carry on as doing your work there, but have your mailing address somewhere else for business purposes.

2. I would assume she would act as your landlord, thus you having to sign an agreement that you would pay $$ amount to so and so, for housing. You can then claim that on your taxes, but she has to claim she has a business renting it out to you.

3. You should get EIN soon and then register your business. Better talk to an accountant about this though.

4. Usually you'd make more money if you are self employed, but there is a lot more work involved running your own business, setting aside money to pay taxes, etc. When you are full-time there is more taxes taken out of your wage and you don't make as much.. that and you can't control what you're making either.

5. I wouldn't say needing one, just use a coffee shop for a meeting or go to clients. I have only recently moved and live in a condo, they offer a board room and another meeting room.. so I use those if my clients want to come see me. Most designers travel to their clients anyway.

[Harold Mansfield]

Hi,

I recently moved to US, from Canada and I would like to become self-employed. I would like to work from my home computer as a web developer and I have some questions about this.

In my lease agreement it states that I am not allowed to run a business from my apartment. As a freelancer working from home for international clients and not having business meetings in the apartment, would this be an issue? Do I have to change the lease agreement?
No. They have no control over what you do on your computer. But if you start having meetings and cleints to your apartment, then that is definitely a violation.

Technically, all you really need is laptop, an internet connection and a mailing address. Not a defined physical location.

2. I'm in US on J2 visa(I do have a working permit) and this visa states that I am not allowed to support my spouse. Would working from the apartment she leases be an issue? (I don't think I am allowed to pay for rent or put this as an expense on my tax return)
I don't see any reason to do that. Just work from your own place. See if there are any restrictions for adding her as a business partner. That way you aren't "supporting her", she's an owner and is legally entitled to the profits.


3. Do I need anything else than a EIN number to start this? Do I have to get the number before I start or can I do it at the end of the year, before tax forms are submitted?
You can start as a sole propreter. You don't neccessarily need an EIN until you incorporate.


4. Somewhat related - I also have the option to work from home in US for a Canadian company as full-time employee. Is this better than being self-employed? Let's say job security/money are not an issue.
That's up to you. Working for yourself is flying without a net. If that is not doable right now and you need an income to depend on, then working for someone may be the better option until you can afford to take the risk.


5. Any recommandations for an office(in case I have to use one)? Maybe something governmental, or something that helps small business to grow.
SCORE: Free Small Business Advice | How-to Resources | Tools | Templates | SCORE (http://www.score.org/)
SBA: Starting & Managing a Business | SBA.gov (http://www.sba.gov/category/navigation-structure/starting-managing-business)
USA.gov: USA.gov: * Small Business Resources (http://answers.usa.gov/system/selfservice.controller?CONFIGURATION=1000&PARTITION_ID=1&CMD=VIEW_ARTICLE&USERTYPE=1&LANGUAGE=en&COUNTRY=US&ARTICLE_ID=13221)

[nealrm]

1) Landlord are most concerned that a business will bring in traffic that would interfere or bother other tenants. Since you are not meeting clients at your home I would not worry about it too much. Be discrete and you should be OK. Even if the landlord finds out I suspect that he would rather have a good tenant working on a computer in their home, than a vacancy or bad tenant. Paying the rent a few days early will go a long way towards making sure the landlord will keeps a blind eye.

2) If you work and are married, then I do not see how paying your share of the house rent where you live would be support. But check with immigration.

3) If you were given a tax ID number with the visa you can use that.

4) Not sure, it depends on the offer.

5) Why have an office if you are not planning on having clients visit you. Don't pay for what you will not be using a majority of the time.

[Brian Altenhofel]

Re: the first issue about the clause in the lease prohibiting running a business out of your apartment -

Some municipalities are over-nannyish and have extremely strict zoning laws. Without that clause in the lease, if the apartment is zoned solely for residential use and the municipality with jurisdictional control requires either a zoning change, special use permit, or other red tape to operate a business from a specific location, the landlord would be considered responsible for allowing an illegally operated business on his property. By adding that clause, the landlord is essentially making sure his own backside is covered in such an event. That said, if the municipality does have such strict zoning regulations, you may need to check those out to make sure that you're still okay.

Zoning regulations are a big part of why I will never move into (or even just outside) a city.

[billbenson]

Just a comment about running a business v.s. working for someone. The top income working for someone is usually limited. And these days there isn't that much job security. Having your own business has a somewhat unlimited earnings ceiling and possibly less job security.

[Pack-Secure]

First thing is to check with Immigrations to make sure that your work visa covers this type of venture.

[DeniseTaylor]

Hi

There are several reasons why you may not be allowed to run a business from home.

1. It would cause liability issues with landlord's insurance. People coming in and out could slip and fall, putting landlord at greater risk.
2. Property is not zoned for it.
3. It could cause a nuisance for neighbors, and possibly the landlord.
4. It could interfere with something the landlord is doing, and thereby be a nuisance to him/her.

There are many ways around this, including being up front with your landlord. If it were me, I'd make sure I was ready and able to move if the landlord found out or disapproved. What if you get rolling and get shut down? It would put you out of business. It's not likely and he probably wouldn't shut you down, but it's possible.

And you don't want to start a business under that kind of conditions. Be prepared for anything.

[Harold Mansfield]

Far be it from me or anyone else to tell you to "bend" the rules. Especially with your immigration concerns. However, if your business is purely web or computer based, and you are a one man show, are you really technically running at business out of the apartment, or just working from home? If that is the scope of your business, at home on your computer, I think you may be over thinking it.

There are no rules against working from home on your computer.

However, if you want to bring clients over, assemble products and so on, then I can see that being a direct violation.
But how is anyone to enforce a rule that restricts what you can and cannot do on your own computer?

[billbenson]

I agree 100% with Harold. I work only on the phone and computer doing online sales. I'm in a house I own in a controlled community. They don't allow businesses to operate out of properties here. I once had the president of the community at my house when I received a business call. I took the call and he waited. No big deal.

Just go about your work on your pc and don't tell anybody. You will be fine from the landloard standpoint.

Think of all the people that are telecommuting these days. Do they tell their landloard what they are doing?

I can't comment on the immigration stuff though. That's a different issue.

[new]

Hi,

Thank you all for your answers. I do have a few more questions :(

Do I have to register my business which to be honest I don't consider it is a business? Should I use my home adress or PO box?
Do I really need an EIN number?
Do I need a business bank account or can I use a regular account to be payed or deposit cheques? (I think it's recommended to have one just to keep personal expenses from business expenses)
Accounting wise, have you hired an accountant that does your taxes? Is there a type of accountant I should kook for?

Thank you :)