Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 1, 1995 TAG: 9511010052
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: LENGTH: Medium
Do owners of home-based businesses work in their pajamas?
W. Fain Rutherford said he thinks so, and guessed it is probably the best part of working at home - although he does not speak from firsthand experience. He is a lawyer at Woods, Rogers & Hazlegrove in Roanoke, which has a big office downtown.
Rutherford does know that even in jammies, having a home-based business isn't child's play. Tuesday, he described for an audience of 38 people at the Roanoke Airport Marriott the insurance considerations home businesses face, warning that a homeowner policy alone may not be enough.
Other speakers at the seminar put on by the firm and the Roanoke Regional Chamber of Commerce said there are tax, zoning and legal issues as well for the more than 40 million Americans who go to work downstairs instead of downtown.
At least one person at the half-day seminar, piano tuner and teacher Carolyn Macneal of Giles County, clearly understood the speakers' message that details count. She drives to and from the pianos she tunes and the student she teaches, and she has run into an IRS roadblock on the deductibility of her gas and other automobile expenses.
She has long deducted those costs from her taxable income. Based on the presentation by Nicholas C. Conte of the law firm, it seems she goofed. The IRS would hold that she is commuting as she drives to the first job of her day and home from the last, and no deductions are allowed for that.
It may seem a minor point, but she said the deduction has totaled thousands of dollars per year and made the difference between whether her Fine Tuning Piano Service made or lost money. Macneal said she plans to make amends with the federal government if she cannot find a way to satisfy guidelines for earning the transportation deduction.
When it comes to writing off home office expenses, business owners are in the clear if the office is where the business's primary activity takes place. No deduction could be taken, however, by an owner who, say, spends 30 hours a week on the road making sales calls and 12 hours a week in a home office, Conte said.
"The thing has to be structured in a way that falls within some very narrow guidelines," Conte said.
Most community zoning laws allow home businesses, though local ordinances may limit noise, traffic and the storage of goods outside, said speaker Clark H. Worth, also of the law firm.
Rutherford, the speaker on insurance, said guidelines vary from case to case, but homeowner policies normally don't protect the owner's home business. A commercial policy that does can be obtained for a home business and may help the owner survive a fire or other disaster by paying the business its usual income for up to 12 months.
No matter how long and complex the document, Rutherford advised, "read your insurance policy." It is usually possible to buy more insurance to close gaps in coverage.
by CNB