Know the Rules: Home-Based Businesses Strain to Comply with the Complexity of IRS Regulations

By McKanic, Arlene | Black Enterprise, December 2004 | Go to article overview

Know the Rules: Home-Based Businesses Strain to Comply with the Complexity of IRS Regulations


McKanic, Arlene, Black Enterprise


The rules and regulations that home business owners must adhere to are more daunting than ever. Particularly challenging are the tax regulations, according to Home-Based Business and Government Regulations, a report compiled for the Small Business Administration by Henry B.R. Beale of Microeconomic Applications Inc. At the federal level, IRS regulations penalize home-based businesses when it comes to deductions, while at the local level, zoning laws and other stipulations present significant barriers to entry. Having to comply with certain building, fire, and health codes can also burden home-based businesses.

Beale's report supports previous research published by the Office of Advocacy, which showed that federal regulations were more of a problem for the smallest businesses--those with fewer than 20 employees. Roughly 53% of all small businesses are based in the home. More than two-thirds of all small businesses are either sole proprietorships, partnerships, or S corporations. Ninety percent of home-based businesses have no employees and 77% have gross receipts under $25,000. Moreover, 52% of home businesses provide services; 16% are in construction; 14% are in retail trade; and the remainder are in areas such as finance and real estate, manufacturing, and wholesale trade.

State tax codes are often clearer than federal ones. State taxes don't apply to most home-based businesses and, when they do, they're fairly simple. However, home business owners spend about an hour a week on activities such as record keeping, just for the purpose of filing federal tax forms. Not only are the rules often hard to understand but some of the tax laws themselves are confusing. For instance, the IRS requires that a home-based business file income taxes, employee taxes and expenses, and depreciation. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Know the Rules: Home-Based Businesses Strain to Comply with the Complexity of IRS Regulations
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.