Starting a small business

Paul Campbell3 said:So, if he sets up a lease agreement for, say, $833 a month, how much tax is his wife actually going to be stuck paying on that?
Does she also need to worry about getting some specific technical certifications or compliance permits for the garage to be legal?

I’m a little lost here—does this mean she has to officially register the garage as a commercial business space? 😲

The IRS determines the amount based on their own internal tables. For instance, I work in an office owned by my mom, and we set the lease at $100. At $0.37, Penn State calculated the value for that space, and that's what Mom pays taxes on; they don't really care about the $100 part. If she were to pay more than the amount they've benchmarked, the tax would just go up.
Just pick a baseline amount; they don't really care about the specifics as long as it's written in the contract, because they'll just use their own math anyway.
You'll just need the standard property tax filing form so the tenant gets registered and can receive the tax assessment in the mail. 🙂🙂

graniterider10 said:The IRS determines the amount based on their own internal tables. For instance, I work in an office owned by my mom, and we set the lease at $100. At $0.37, Penn State calculated the value for that space, and that's what Mom pays taxes on; they don't really care about the $100 part. If she were to pay more than the amount they've benchmarked, the tax would just go up.
Just pick a baseline amount; they don't really care about the specifics as long as it's written in the contract, because they'll just use their own math anyway.
You'll just need the standard property tax filing form so the tenant gets registered and can receive the tax assessment in the mail. 🙂🙂

Yeah, even my brother confirmed that, but apparently there’s a loophole where the owner just gives him written permission to run the business. Now he just has to check with the local Chamber of Commerce to see if that's even an option for this type of business.

Hey everyone, I could really use some help here... I'm looking into opening a rental shop, but I'm feeling totally overwhelmed. Does anyone know who I actually need to talk to in town? Like, which specific agencies handle all the legal paperwork, and what kind of damage am I looking at financially? I'm talking about the costs for registering the business, taxes, and if I hire one employee plus work it myself—what does that look like? I’ve already got the square footage and rent figured out, but these other details are killing me. And this tax stuff—do you really have to pay that every single month? How does that whole system even function? If anyone has the patience to give me a breakdown of the basics, I'd appreciate it. Also, if there are any small business owners out there, please tell me your horror stories or successes. Thanks!

Is it possible to open a hair salon as an LLC if I haven't actually completed cosmetology school myself? If it is allowed, am I legally required to hire a licensed professional with a master's certification to run things?

Just double-check, but if you’re actually serious about opening up, yeah, you’re gonna need a business manager who actually knows their stuff.

Anthony Collins12 said:Is it possible to open a hair salon as an LLC if I haven't actually completed cosmetology school myself? If it is allowed, am I legally required to hire a licensed professional with a master's certification to run things?

You can certainly start the business, but you absolutely have to hire a licensed cosmetologist to work there!

amberlynx said:You can certainly start the business, but you absolutely have to hire a licensed cosmetologist to work there!

With an LLC, you don't actually need a professional certification to get things moving—that's the whole difference between this and running a sole proprietorship. When you're setting up an LLC or a single-member LLC, nobody is going to come knocking to ask if you have the right credentials or a degree.

Paul Campbell3 said:Fine, but what’s the point? You set up an LLC, don't register for sales tax, pull in somewhere between $5,500 and $6,500 a month (meaning you could theoretically stay under the simplified tax threshold where your monthly payments for Social Security, Medicare, and federal tax would be about $417), and then you just pay your wife $2,500 from that money—which she then pays tax on because you're essentially renting space from yourself?

I mean, does that garage or workshop have to be officially registered as a commercial property first or what?

And what about the people making dolls, bedding, or quilts at home? They've got the sewing machines and tools, working out of a garage making rag dolls and blankets. Are they also "renting" from themselves and paying tax on that after they've already paid their initial taxes?

I'm asking because I see that bike repair can be registered as a side hustle, and maybe a repair shop qualifies under "repair of personal items and household goods" per the NAICS codes, which might allow you to run that kind of business right out of your own house.

If you own the house, you can definitely register a bike repair business at your home address. It's actually easier if you're the owner. You just need a property deed or a purchase agreement. If a family member owns it, you just need their consent and proof of ownership. If you don't own it, you'll need a formal lease agreement. For these kinds of small operations, the zoning inspections aren't really a thing.

Just a heads-up for anyone thinking about opening a restaurant, running a retail shop, or starting a local travel agency (unless you're strictly online). You really need to double-check your zoning and building permits first. Any space you use for these kinds of businesses has to be officially designated as commercial property. You’ll need the actual paperwork—usually a Certificate of Occupancy—to prove it. If the documentation doesn't explicitly state the space is cleared for that specific use, you won't pass inspection. Local authorities, like your city's zoning board or the county clerk's office, set strict minimum requirements, and they aren't going to hand out a business permit if your building's legal status doesn't match your plans.

Hey there! So, I’m looking at launching my own little freelance gig this fall—mostly intellectual services, translation work, that kind of thing. What’s the deal with running a small business while finishing up some vocational training? I’ve got this training program lined up at a local firm, and I should be starting in about a month. While I'm in it, the unemployment office handles all my health insurance, Social Security, and those other mandatory taxes and stuff. If I pull the trigger and officially open my business in September, is that actually doable? And if it works out—assuming the government lets me get away with it—I wouldn't have to worry about paying those self-employment taxes through my own business yet, right?

That’s impossible. You can't be currently employed and enrolled in a training program at the same time. Besides, you end up paying double the contributions—wasn't that just the big debate recently?

David Mitchell4 said:That’s impossible. You can't be currently employed and enrolled in a training program at the same time. Besides, you end up paying double the contributions—wasn't that just the big debate recently?

What about if I run my own LLC? Like, if I'm just listed as the director and not officially clocked in as an employee? Do I still have to cover all those social security taxes myself, or does that get "taken care of" through the professional training program?

Is a small business owner allowed to write off the cost of their own supplemental insurance policy as a tax-deductible business expense?

Thomas Diaz8 said:Is a small business owner allowed to write off the cost of their own supplemental insurance policy as a tax-deductible business expense?

No, they can't. There was a time when you could include those types of things on your tax return, but they phased that out quite a while ago.

I’m posting this question here as well... is it actually necessary to get consent from the residents to open a small business in a residential
building if the type of work can be carried out there without issue?

I think so.

vividskipper15 said:I’m posting this question here as well... is it actually necessary to get consent from the residents to open a small business in a residential
building if the type of work can be carried out there without issue?

Honestly, this is news to me! I haven't come across anything like that while digging through the legal codes.
Your HOA representative might just be trying to flex their muscles a little bit (I saw your post on that other thread).

The law basically lists certain "quiet" businesses that are perfectly fine to run out of an apartment, and that should be the end of it.

If you look at some of the finer print, it mentions that when opening a business in a residential space, you should submit a signed consent form from the residents to the Department of Commerce—but let's be real, nobody actually asks for that.

I went to check on things today, and turns out resident consent isn't actually required. Unfortunately, my building representative is making things difficult. Even though
the noise level would be negligible, along with the foot traffic and everything else, he’s still pushing back. He told me I can't even put up a nameplate on the building
because it's considered a common area, and he claims I won't be able to get enough signatures from the neighbors.

vividskipper15 said:I went to check on things today, and turns out resident consent isn't actually required. Unfortunately, my building representative is making things difficult. Even though
the noise level would be negligible, along with the foot traffic and everything else, he’s still pushing back. He told me I can't even put up a nameplate on the building
because it's considered a common area, and he claims I won't be able to get enough signatures from the neighbors.

Human spite is truly endless...
Just mount the sign on the front door.

I guess it depends—is a certified lease agreement sufficient to prove the address, or is a property deed only required when registering a business at one's own residence?