I created The Pay At Home Parent in February of 2018 to help you be a successful home-based business owner, blogger or side hustler. As a wife, mom and frugal homemaker, I still make a full-time income on a part-time work schedule and I know that you can too!
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When I first started my home business, I didn’t know anything about the legal side of things. For all I was concerned, just make money, pay your taxes and you’ll be fine.
Sadly, it’s not as easy as it sounds. There are a few things to consider before diving into a side hustle. While I didn’t run into any legal issues myself, it’s still possible for anyone to be exposed to a potential lawsuit.
It’s always best to cover yourself and know what to do from the start.
Blogging is an extremely popular side hustle and home business these days. When you get your feet in the water, you could find yourself making $500, $2,000, even $20,000+ per month!
What’s even better about blogging is that you can start one for the low monthly cost of a specialty cup of coffee. It’s one of the only businesses that you can start so cheaply.
The effort you put into your blog is the only limit to your potential income. When your blog successfully reaches the right audience, you can be earning the big bucks, too.
But with more eyes on your website comes more potential lawsuits. You don’t want to find yourself in a sticky situation and lose your profits (or even worse, your personal assets).
If this sounds like you, just going about your business as tasks arise, consider consulting with a blogging attorney. You can quickly cover yourself with just a few content tweaks and additions.
You can get your blog legally set up the right way by visiting Entrepreneur Legal Corner, owned by Mariam Tsaturyan, a licensed attorney. Mariam offers affordable content bundles that you can use to ensure that your blog is legally covered should any issues arise. Check it out and get in touch with Mariam if you have any questions about what your blog needs!
Please note that I am not an attorney. None of these tips are meant to be taken as legal advice. If you have legal questions, consult an attorney in your area.
The Legal Side of Business: What You Should Know
Not all side hustles are created equal and it’s important to be aware of all the legalities of owning your own business apart from any kind of employment you may have. From licenses, insurance, and taxes to branding, equipment, and other often-overlooked concerns, this article will give you a framework to get started.
There are generally two types of licensing requirements, those for operating a business in general, and occupational licensing for trade skills such as plumbing, electrician, massage therapy, etc.
Your business may be required to be licensed in multiple jurisdictions. From the top-down, these would be state, county, and city licenses. Given the number of jurisdictions within the US alone, it would be impossible to provide a definitive guide. Start by searching for the requirements on your state’s website, and then move down to the county/city level with your research.
If the skill you’re employing requires a professional license, then you’re probably already more familiar with those recruitments already. If not, do a search, again starting at the state level to determine what licenses for your trade are required.
Don’t skip over this step. Obtain the necessary licenses as the penalties for operating a business without a license could easily wipe out far more money than you made in your fledgling venture.
If you are injured while performing your services on someone else’s property, you may be able to seek monetary compensation for your losses if the accident was someone else’s fault.
However, you also need to protect yourself from clients who may not be happy with your work, or worse, were injured on your property while visiting your place of business. For those reasons, you should carry business liability insurance on your physical property, and errors and omissions insurance to cover disputes regarding the quality of your services. You can obtain both of these types of insurance by starting with an online search or contacting the insurance agent with whom you have your other insurance (such as homeowners or auto).
It’s important to note that if you are driving for a service such as Uber or Lyft, you’ll need to make your auto insurer aware of this as carrying passengers requires a different kind of policy. Don’t skip over this step either, as your losses could be substantial if you don’t carry the proper coverage.
Again, there is no one size fits all answer to the question of taxes. This too will vary based on the type of side hustle you’re engaging in, and federal, state, county, and city tax codes. You may be required to collect sales tax on your products or services, you may not. You’ll have to do the research on the IES website and the Department of Revenue website for your state.
Depending on the size of your business, you may be required to file quarterly income taxes. Or, if your side hustle has employees of its own, you’ll definitely have increased tax filing requirements which could necessitate engaging the services of a tax professional.
If you are going to do business as anything other than under your legal name, you will need to either register a corporation, LLC or, at the very least, a DBA (Doing Business As) statement. This prevents duplication of a business name so that each entrepreneur is protected against problems that could arise if there are two “Joe the Plumbers” in your state. You wouldn’t want to get blamed if the other guy is out there committing fraud with the same business name.
Buy the best equipment you can afford and keep detailed records of its acquisition for tax purposes. Insure it, and if appropriate, buy extended warranties to protect your business against loss due to equipment failure.
If you have an employer, either full or part-time, make sure that the terms of your employment allow you to have a side hustle. This is especially true for many trade skills, as there may be “no compete” clauses in your employment contract. If so, a side hustle could cause you to lose your primary source of income.
No matter what you decide to do, make sure to do your research so you can legally operate the side hustle of your dreams.