Do I need to get a business license to have people pay to record music in my bedroom studio?
Question by Kidd L: Do I need to get a business license to have people pay to record music in my bedroom studio?
I have a spare bedroom that I’ve set up to be my own recording studio. If I have local people coming over to use it, and they pay me for it, does that qualify me as a business? If so, do I need to get a business license, or have my house zoned for this?
What can I do to avoid this? (legally, of course)
Best answer:
Answer by capwest5a
Well, if you’re young (under age 18), then you probably don’t need a license. However, if you are older than 18 and you are having a lot of ‘traffic’ at your house (people coming and going all the time), then yes, that’s when zoning laws come into effect. If you have a lot of ‘traffic’, eventually at least one of your neighbors will get mad and report this activity to the police or another agency.
You personally cannot have your house ‘zoned’ for a particular business. Your house is already zoned as either residential or mixed-use (it’s probably zoned as residential).
Any income you make SHOULD be reported on your yearly federal income tax return – but again, if you are under 18, the IRS doesn’t really care. If you are over 18, then the IRS begins to start to care. Unreported income will cost you more in the way of IRS penalties than it would cost to get a business license as a sole proprietorship.
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My brother and I used to run a limousine company (yes, it was licensed) out of our house. But ONE neighbor got tired of the constant ‘traffic’ and activity, and boom, here comes a person who works for a state agency. We didn’t get in any trouble – but basically we had to shut down because it’s essentially illegal to run a business in a residentially zoned neighborhood. I mean, if I was doing small business accounting from my home (which I actually turned to and did for 20+ years), no one really notices. But if you have cars coming and going all the time, people notice.
What do you think? Answer below!