Small Office/Home Office - SOHO

AAA

DEFINITION of 'Small Office/Home Office - SOHO'

A business that is operated out of a business owner's residence and can be located in an established office within the residence. A small office/home office is considered a microenterprise since it typically has fewer than ten employees and is categorized one notch below a "small business." Traditionally, SOHOs are focused on white-collar jobs.

INVESTOPEDIA EXPLAINS 'Small Office/Home Office - SOHO'

Prior to the proliferation of larger-scale businesses during the 19th century, most businesses would be categorized as SOHO. Entrepreneurs running this type of office include lawyers, consultants and freelancers who might not require a formal office to meet clients. Because a SOHO operates out of a home, some tax issues are treated differently by the Internal Revenue Service (IRS).

RELATED TERMS
  1. Principal Place Of Business

    The primary location where a taxpayer's business is performed. ...
  2. Home Office

    An office located inside the taxpayer's home that serves as the ...
  3. Self-Employed

    A situation in which an individual works for himself or herself ...
  4. Home Office Expense

    Expenses incurred from the operation of a business or the performance ...
  5. Entrepreneur

    An individual who, rather than working as an employee, runs a ...
  6. Business

    1. An organization or enterprising entity engaged in commercial, ...
RELATED FAQS
  1. What are some examples of general and administrative expenses?

    In accounting, general and administrative expenses represent the necessary costs to maintain a company's daily operations ... Read Full Answer >>
  2. How do dividend distributions affect additional paid in capital?

    Whether a dividend distribution has any effect on additional paid-in capital depends solely on what type of dividend is issued: ... Read Full Answer >>
  3. Why can additional paid in capital never have a negative balance?

    The additional paid-in capital figure on a company's balance sheet can never be negative because companies do not pay investors ... Read Full Answer >>
  4. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    10 Tax Benefits For The Self-Employed

    Running your own business has both personal and financial perks.
  2. Personal Finance

    Recognize And Avoid "Work At Home" Scams

    From pyramid schemes to envelope stuffing, there are a lot of scams masquerading as legitimate part-time work.
  3. Taxes

    How To Qualify For The Home-Office Tax Deduction

    Homebodies can save big on their tax bill. Learn how to get in on the action.
  4. Entrepreneurship

    Top 10 Home Business Tax Tips

    If you work for yourself, make sure you are getting the most for your tax dollars.
  5. Options & Futures

    Returning To Work: Is It Right For You And Your Family?

    Returning to the workplace can create some unique stresses. In the end, does the additional income justify the extra expenses?
  6. Entrepreneurship

    Creating A Home Business Work Space

    Your work environment can make or break your career as an entrepreneur.
  7. Economics

    Understanding the Top Line

    Top line refers to a company’s gross sales without any reductions for discounts or returns.
  8. Economics

    What's an Allowance for Doubtful Accounts?

    The allowance for doubtful accounts represents the percentage of the accounts receivable the company expects to write-off as uncollectible.
  9. Fundamental Analysis

    Understanding Activity Ratios

    Activity ratios measure how effectively a business uses its assets.
  10. Investing Basics

    What is Accrued Income?

    In a mutual fund, accrued income is earnings that have accumulated over the year, but have not yet been paid out to shareholders.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!