Moving Home

Think driving in traffic for two hours is a strong impetus to creativity? Tom Seufert sure didn't. He was all set to rent the original Lucas Films building in West Los Angeles to house his company, Visual Music, when a friend suggested he take a drive down the notorious 405 freeway during rush hour. "I drove it for three days [and then] canceled all the orders," says Seufert, whose company has produced music scores for TV commercials and feature films since 1981. "And I decided I wasn't going to live my life that way, in my car for two hours a day,"

Seufert moved home instead, selling off a 7-foot-wide English console mixing board that had required him to lease commercial studio space and replacing it with a small digital mixing board, which he complemented with a G3 computer and audio editing software. He now collaborates with composers and musicians via cable modem. Even with softening advertising budgets, the move home in 1998 has proved profitable for Seufert, who had sales of $400,000 last year.

If you've contemplated making the move home, there's never been a better time to do it. Zoning restrictions have relaxed in the past few years due to the growing number of home businesses and telecommuters, according to Alice Magos, a senior writer/analyst for the CCH Business Owner's Toolkit. Before making your move, though, check with your city or county hall to see whether there are zoning restrictions in your area, particularly if you'll be bringing delivery truck and customer traffic into the neighborhood. And if you plan on having employees in your home, liability and OSHA regulations are issues as well. Magos suggests you take out a business owner's insurance policy, which will cover your office equipment and any liability related to your business. Another option is to take out a business pursuits rider that eliminates the exclusions of office-related items from your homeowner's policy.

So legally you're set to move the business, but will your big-office mentality (and furniture) fit your home office space? "One of the areas most home offices err on is not having enough filing space," says Barbara Hemphill, a professional organizer and author of Kiplinger's Taming the Paper Tiger at Home. Hemphill suggests keeping only pertinent files in the office area and using filing cabinets for extra counter space. And unless you're certain that you'll eventually move back into a traditional office, you should donate excess furniture and equipment that is not saleable and take a tax deduction rather than pay for storage costs.

Speaking of tax deductions, there's a whole host of things you'll be able to deduct when you move operations home. "You can deduct the portion of your mortgage that relates to whatever percentage of your house your home office uses, but you have to use that office space exclusively for your business--it has to be your principle place of business, and you have to be able to meet with customers there," says Magos. Twenty percent of utilities, home repairs, real estate tax, mortgage interest and even house cleaning may also be deducted. In addition, you can deduct mileage from trips to see clients, whereas if you have a regular office, you are unable to deduct the costs of your two-hour commute. Seems like reason enough to stay home.