Nice find ZsaZsa. I hadn't noticed the "supplementary" zoning regulations contained in that other 'general extras' section (? 345-60. ---- Supplementary zoning regulations. [Amended 9-10-2003 by Ord. No. 03-113; 10-8-2003 by Ord. No. 03-134]). Interesting rules on home occupations (and other interesting points) I hadn't noticed before.


2. Standards for Specific Accessory Uses.

a. Home Occupations.

i. The practitioner must be the owner or lessee of the residence in which the home occupation is contained.

ii. The practitioner must reside in the home as his or her principal residence.

iii. There shall be no external evidence of the home occupation.

iv. The practitioner shall not utilize the services of more than one non resident employee.

v. There shall be no retail sales, manufacturing or industrial operations conducted on the site.

vi. No more than one business visitor shall be permitted at any one time.

vii. There shall be no sign identifying the home occupation and there shall be no identification of such home occupation upon any mailbox.

viii. The residential character of the neighborhood and the premises shall not be subordinated to the home occupation use.

ix. The home occupation shall be clearly incidental and subordinate to the principal use of the dwelling for residential purposes. The maximum area devoted to the home occupation shall be limited to not more than forty percent (40%) of the total area of the floor where the home occupation use is located, excluding space used for a private garage, or nine hundred (900) square feet, whichever is smaller.

x. No equipment or process shall be used in such home occupation which creates glare, fumes, odors, electrical interference, medical waste, or other nuisance factors detectable to the human senses outside the lot on which the home occupation is conducted.

ETA: Found this on the zoning site:
"The practitioner shall not utilize the services of more than one non resident employee."

THANKS AGAIN EVERYONE!! And I'll let my accountant handle any deductions for me - no audits please!

(for some reason it wouldn't let me edit my last post)

Thanks! You've all been very helpful. I called zoning and they said it was okay to have a home-based business. I am still reading through the zoning info posted earlier - a great help!

What if I had an employee working there with me (or an independent contractor)? Would that be allowed? I asked zoning and they kind of fudged the answer, saying no public disturbance, which I took to mean "as long as it's not obvious to everyone", but I prefer to stay on the right side of the law if at all possible!

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The earned income credit is a very generous credit. If you qualify, you can get a refund of more than you actually paid during the year. So because the feds are essentially giving a gift of extra cash in some cases, they will want to verify that you actually qualify. Now that home office thing. I could probably do that deduction but I don't, heard too many red flag warnings and don't need any tax audit excitement in my life.

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That's easy, because they can't fight back. You, the IRS warrior, can rack up great victory numbers, even though the money is minor compared to big shot who owes millions but lawyers up and makes you work.

Only in America do we solve revenue problems by cutting the budget of the tax collectors. That's almost as good as the JC parking authority raising revenue by selling it's parking lots!

brewster - but the poster wasn't asking about the tax implications or whether he'd be audited...just whether it was against zoning or not.

i'm fairly certain that it is not.

but, i do know they say it'll get you audited faster.

(and, I didnt know Earned Income Tax Credits get audited a lot. that sorta doesn't make much sense. why pick on the poor folks?)

EAS: what you are referring to is if you take a deduction for the depreciation of the house besause of the home office. This reduces your "basis" in the home so when you go to sell it you realize more capital gains. If you were only taking a deduction for a percentage (based on size of office vs. size of house) of your mortgage interest, property taxes, casualty losses, utilities, repairs, etc. then you wouldn't have this problem.

Of course I'm not a tax professional so I wouldn't try to do any of this myself. That's just asking for an audit.

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I think what you mean is that you would have to pay capital gains on the portion that is not owner occupied residential. This is the same as owning a multifamily house, which the OP does.

I read an article in the NY times about how it's not always a good idea to take a home office deduction. If your house has gone up alot in value and you sell it, you have to pay business taxes on a portion of the profit, because as you've previously declared, a portion of your house is a business.

If this scenario applies, you may want to investigate.

Butch, any tax website or book will tell you that the only single thing more likely to get you an audit than a home office deduction is taking the Earned Income Tax Credit.

For non industrial, non retail use, I don't think zoning is an issue. There's lots of doctors and therapists offices in residential apartments and houses.

I've been in tax hell, be afraid, be very afraid.

I've known tons of people who live in residential areas, apartment complexes, etc who deduct a home office from their taxes. So, I really don't think it's an issue. I think the zoning is a completely different area.

Given that you have a separate space and nothing brings down an audit like a large home office deduction, perhaps the best thing is to "rent" it to yourself, and deduct the rent from your form C. You'll also file a form E to show the rental income, and so you can deduct a percentage of the mortgage, utilities, depreciation and maintainance. Maybe RE taxes too, I forget.

I don't know the answer. Do you know how your street/building is zoned? The JC Municipal Code is on line free at this site:

http://municipalcodes.lexisnexis.com/codes/jersey/

If I recall, Zoning is Chapter 345, and Article 5 has permitted principal uses for the various zonings. Not sure that will answer the question, but it can't hurt to look it over.

Not sure if this is the same thing... but I use my basement and garage as an art studio and I deduct a portion of my mortgage for business purposes. I would never think that this is a zoning issue unless I planned on opening it up to the public. I think that as long as you ran it like a home office and did not have your business open to the public, than why would they need to know?

I'd like to set up a home office to run my business from - not to telecommute to work for another employer. Does anyone know if JC allows this in a residentially zoned area? I have a 2 family and may take over the second unit as my office. It would just be me - no employees or customers coming by.

I'm going to call Zoning too to see what I can find out from them but haven't found anything on the net so far. Any help appreciated!