Home-Based Business Glossary

Funding and growing a business using personal savings and reinvested profits rather than external capital from investors or lenders.

A permit issued by a government agency that allows individuals or companies to conduct business within the jurisdiction.

A written document describing a business's objectives, strategies, market analysis, financial projections, and operational structure.

A legal registration that allows a business to operate under a name different from the owner's personal legal name, also called a fictitious business name or trade name.

A business cost that can be subtracted from gross income to reduce taxable income, such as office supplies, software subscriptions, and professional development.

The buying and selling of products or services over the internet, often through platforms like Shopify, Etsy, or Amazon.

A unique nine-digit number assigned by the IRS to identify a business entity for federal tax reporting and other business purposes.

Quarterly tax payments made by self-employed individuals to cover income tax and self-employment tax obligations throughout the year.

Working independently on a project or contract basis for multiple clients rather than being employed full-time by a single company.

A government-issued permit that authorizes the operation of a specific type of business from a residential property, subject to local zoning conditions.

An IRS tax deduction for self-employed individuals who use a dedicated portion of their home exclusively and regularly as their principal place of business.

A self-employed person who provides services to clients under a contract, maintains control over how the work is performed, and is responsible for their own taxes and benefits.

A business structure that combines the liability protection of a corporation with the tax flexibility and simplicity of a partnership or sole proprietorship.

The amount remaining after all business expenses are subtracted from total revenue. This figure determines income tax and self-employment tax obligations.

The process of building and maintaining professional relationships for business growth, referrals, and knowledge sharing.

A tax structure where business profits are not taxed at the entity level but instead flow through to the owner's personal tax return.

A tax provision under Section 199A allowing eligible self-employed individuals to deduct up to 20% of qualified business income from their taxable income.

The legal connection between a business and a taxing jurisdiction that obligates the business to collect and remit sales tax in that jurisdiction.

The capacity of a business to grow its revenue and operations without a proportional increase in costs or infrastructure.

The IRS form (attached to Form 1040) used by sole proprietors and single-member LLCs to report business income and deductible expenses.

A tax of 15.3% on net self-employment earnings that covers the individual's Social Security (12.4%) and Medicare (2.9%) contributions.

An unincorporated business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

The specific group of consumers most likely to purchase a business's products or services, defined by demographics, geography, needs, and buying behavior.

A remote worker who provides administrative, creative, or technical services to businesses, commonly hired by home-based entrepreneurs to manage workload without on-site staff.

Municipal or county regulations that specify the types of activities permitted on properties within designated geographic zones, including restrictions on commercial use in residential areas.