Yes, in many places, but a home business still follows local rules. The SBA says zoning ordinances can still apply to home-based businesses and that zoning is usually controlled locally, so check with your city planning office and any lease or homeowners association rules first. Some areas also ask for a home occupation permit. ProfitDrawer's startup guides suggest checking before the first paid job; the SBA says total registration usually costs under $300.
What to check before you start:
- Zoning. Ask your city planning or zoning office whether your type of business is allowed at your address, and whether there are limits on signs, customer visits, parking or deliveries.
- Licenses. A general business license or home occupation permit from your city or county, if required.
- Lease or HOA rules. Renters and homeowners association members may have their own limits.
- Insurance. A homeowner's or renter's policy may not cover business equipment or a customer who is hurt. The SBA mentions a home-based business rider as one option.
- Trade rules. Some trades have extra rules at home: food sold to the public needs your health department's approval, and a home daycare needs your state's child care license or exemption.
Taxes. The IRS home office deduction generally requires part of your home to be used regularly and exclusively for business, as your principal place of business or where you meet clients. See the related answer on the simplified home office deduction.
Keep business records and money separate from household spending from day one. General information, not legal or tax advice.
Source: Apply for licenses and permits (U.S. Small Business Administration) · Updated
Tools and spreadsheets for this
Related questions
All questions on ProfitDrawer Answers →
General information, not tax, legal or financial advice. Check the rules for your state and your situation.