Starting a Small Business/online business

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Question
Hello,

I am a dependent college student that wants to start a online tutoring business and have a few questions. Where do I get/submit a business and tax registration for? I will be living off-campus, so will my rent be tax deductible for operating my business from that location?
Thank you

Answer
The first part of your question, where do you file a business and/or tax registration, the answer is you may not need to register at all. You should check with your local government, but an unincorporated business like an online tutoring business with no other employees generally is not required to obtain a business registration. However, even if you are a sole proprietor, if you operate under a business name other than your own name, you must file a trade name registration with the District of Columbia.

As for the second part of your question -- "so will my rent be tax deductible for operating my business from that location" -- the answer is probably not.  To deduct a portion of your rent, there are several requirements you must meet.  First, you must devote the space exclusively to business on a regular basis. While you don't have to have a separate room for the activities, the part of a room that you use for the activities cannot be used for any other purpose.  Unless you have a separate desk set up just for your online tutoring business, it is unlikely that you will meet the requirement.  Even if you do, the percentage of space needed to sit at a computer would likely be a very small percentage of your total apartment space, so the deduction would be minor.  For more information see Business Use of Your Home.

I hope this helps.

Starting a Small Business

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David K. Staub

Expertise

I am a business and tax attorney and have spent more than 35 years assisting people in starting a wide variety of businesses. I can answer questions about the basic differences between the various entities available to new businesses, including limited liability companies, corporations, S corporations and partnerships. I can provide guidance in other areas facing start ups, such as hiring employees, signing contracts and obtaining necessary licenses. I can also direct people to sources for answers to specific legal questions which cannot be answered in a forum of this nature.

Experience

I have an extensive practice in the mergers and acquisitions area and have been involved in the tax and legal issues on hundreds of business transactions.

Website
Staub Anderson LLC
Illinois business attorneys

Practice Areas
Business Organizations
-Corporations

-LLCs
-Partnerships

-Joint ventures
Mergers & Acquisitions
-Buying/selling business
Securities Law
Tax Law
Technology Law
-Software licenses
-Development agreements

Trademarks

Organizations
Illinois State Bar Association; Chicago Bar Association (former Chairman of the Corporation & Business Law Committee and former Chairman of the Mergers and Acquisitions Subcommittee; former Executive Committee member, Federal Tax Committee and Chairman of subcommittee on general tax issues); Keystone Foundation (Trustee); Association for Corporate Growth; Midwest Entrepreneur Forum; Midwest Association of Alpha Delta Phi

Publications
Commerce Magazine; YLS Journal; ISBA Section of Taxation Newsletter

Education/Credentials
Harvard Law School, J.D., 1977; University of Illinois, B.S. in Accounting, with highest honors, 1974

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