Can making your home based business a Corporation give you a tax break?

Question

If anyone knows anything about taxes can tell me if I am self employed with a home based business and file it as a Corporation, can this help me in any way on my taxes.

If yes, please explain.

Thanks

Answer 1

I dont know what you mean by home-based business. Is it Amway or Mary Kay, where you are just selling stuff that you buy from someone else? If this is the type of business then you wont have any additional savings by incoporating.

If you have employees/customers in your home regularly and you want to ensure that they cant sue you personally, then incorporating may be advantageous. But generally, the only advantage of incorporating is to limit liability.

You can take all deductions that a corporation can, by just filing a schedule C (sole proprietorship) with your tax return. You can deduct all ordinary and necessary business expenses. You may also be able to deduct your home office expenses if you conduct business there and meet with clients there.

Be sure to document all business expenses and use a separate bank account with debit card. This way all of your income and expenses are in one spot and on one statement, in case of audit. When you want to pay yourself, just write a check to yourself and deposit into your regular checking account.

Be sure to also write down all mileage in a log, so that you can deduct your auto expenses.

Answer 2

depends where you live I guess because all those things would lower your taxes in Australia IF the house was an investment house and rented out - for 1 & 2. Your private residence on the other hand doesn't bring those tax breaks until you sell it and can deduct expenses incurred from th e capital gains tax (if there is any which there wont be if you have lived there long enough) but if you sell in the first few years and do incurred tax then everything spend on increasing value can be deducted. 3 if you hired the right person ie there are breaks for those hiring the long term unemployed etc BUT you would have to pay their tax and it gets complicated which is why so many opt for contract workers who are responsible for their own tax payments.

Answer 3

no you can't unless you have a lot of employees BUT if you are from Canada apparently if you have somebody renting your basement you can now claim 1/2 your utilities instead od 10 %

Answer 4

absolutly no.
matter of fact it will cost you more each year than you might even save in taxes.
you need BIG money to save in this area.
don't swallow the 'legal' safety on this either.
you get taxed and corp gets taxed.

Answer 5

my best option is contact wit a taxes preparation officer
also you may look over irs.com for the common answers for this question