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J.Hazelbaker
J.Hazelbaker, Attorney
Category: Business Law
Satisfied Customers: 4385
Experience:  Experienced and trained in the area of business law.
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Hello. I live in Illinois. The start-up I work for is incorporated

Resolved Question:

Hello. I live in Illinois. The start-up I work for is incorporated in California. If the company reimburses me for rent as I work out of a home office, what are the tax implications for
1) me (I do not have a formal business or consultancy- but could form one)
2) the company
Submitted: 5 years ago.
Category: Business Law
Expert:  J.Hazelbaker replied 5 years ago.

J.Hazelbaker :

Hello. Thank you for using JustAnswer.

J.Hazelbaker :

The money you receive from the company is taxable income.

J.Hazelbaker :

This would be offset somewhat by your home office deduction, if you itemize your deductions.

J.Hazelbaker :

If you were to set up a formal business entity, you could also deduct the cost of doing so.

J.Hazelbaker :

Please let me know what follow-up questions you have. If my above responses have been helpful, please click Accept so that I get credit for the time/effort. You may always restart the thread and ask follow-up questions at any time by clicking the “Reply” button at the bottom of the question/answer thread. You can access this thread later in your profile under the “My Questions” tab.

Customer:

Is the money received for things like buying a computer or paying for internet also taxable income?

J.Hazelbaker :

Yes.

J.Hazelbaker :

But, again, the payments you make to buy the equipment or pay the bills can also be deducted on your taxes.

Customer:

So, I buy a $1,000 computer and the company reimburses me $1,000. What happens after that?

J.Hazelbaker :

Then, when you prepare your taxes would be able to deduct that expense (either in full or depreciate it) on your taxes, thus reducing your tax liability.

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