Home Office/Garage Decuction?

Discussion in 'Business Operations' started by -, Feb 6, 2001.

  1. Guest
    Posts: 0

    A friend of mine who just completed her taxes courses to be a Tax Preparer (NOT accountant, just preparer) told me that since I incorporated this year that I cannot take my home office/garage deduction. I have heard this about C Corps but is this true under S Corp as well?
  2. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Unfortunately I have heard similar rumors as well.

  3. Guest
    Posts: 0

    Guess not many in here have their business' structured as a S Corp.
  4. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    This is being discussed somewhat in The Elements of Business Forum ...I think under "unique deductions" you might get your answer there.
  5. Barkleymut

    Barkleymut LawnSite Bronze Member
    Posts: 1,117

    From what my CPA told me you can. I am an S-corp and decided not to take the deduction since we are going to move in the next couple of years and you have to pay taxes on the capital gain on the home. Man the IRS makes this all so difficult. How about this A FLAT TAX.
  6. Guest
    Posts: 0

    Just got off the phone with my CPA. A corporation C or S CANNOT take home office/garage deduction. You can rent the space out to the corporation but then you have to declare the income as rental income on Schedule E. IRS really makes this stuff tough.
  7. Skookum

    Skookum LawnSite Senior Member
    Posts: 675

    One reason I am not incorporated.
  8. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    All the way.

  9. WheatBookkeeping

    WheatBookkeeping LawnSite Member
    Posts: 108

    Here is a suggestion. If you are S Corp, talk over the idea of establishing an “Accountable Reimbursement Plan” with your accountant or tax guy. Structure the plan so that you are reimbursed by the corp. for your home office costs. Done this way, the situation will be treated as expenses to the corp. only and the reimbursement is not an income to you. No income is created, no FICA or Medicaid is not incurred.
  10. meets1

    meets1 LawnSite Gold Member
    Posts: 3,781

    EXACTLY what wheatbookkeeping said! Think outside the box!

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