If you have a home business, do you have all the necessary licenses? Most home business owners know they must get a Federal Tax ID and most know they must get a state license, but what about your local requirements?
In Simi Valley (California) home businesses without the proper licensing will be getting a ‘friendly’ letter from the city asking them to comply and pay back taxes (story here).
We often think of compliance tax penalties as being the domain of federal and state governments. But government at the local level has licensing requirements too. If you live in a large town or urban area, chances are there is some local ‘piece of paper’ you will need to legally operate. How do you know? Just call your municipality and ask them.
Better to get this call out of the way than deal with penalties later on!