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What are the benefits of claiming yourself as a business for…

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What are the benefits...

What are the benefits of claiming yourself as a business for an adult foster home versus not

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I have one adult with a developmental disability that I provide care for. I also asn a special ed teacher. I do not claim this money on my taxes and I am not a business, would it be more beneficial to be a business for this? I pay for mire than half his care, dinners , vacations, house etc. d

Accountant's Assistant: Is there anything else the Accountant should be aware of?

I own my own home, have 2 vehicles to transport him and I do not have staff as I do it all

Submitted: 4 months ago.Category: Tax
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12/16/2017
Tax Professional: Carter McBride, Certified Public Accountant (CPA) replied 4 months ago
Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,032
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Hey! I'm Carter. I'm a CPA and would be glad to help you with this.
If you are a business, you are able to deduct your expenses. However, in order to be a business, you need to have some kind of profit motive. So, if you are making money on the endeavour, then you can be a business.
Technically, all money that you make should be claimed on your taxes, so if you were reporting the money, then you could deduct your expenses from it.
Let me know if you need anything clarified. If not, please leave a rating. Thanks!
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Customer reply replied 4 months ago
I understand I have to be a business in order to claim and itemize but is it worth it or would it be more profitable to do so? What are the pros or the cons?
Tax Professional: Carter McBride, Certified Public Accountant (CPA) replied 4 months ago
You do not need to itemize if you are a business. You will file Form Schedule C. The pro is the income you are receiving, you can offset with your expenses. That way you will not pay tax on all the income you make. If you have more expenses then income, the loss can offset your other income.
The con us if you do have positive net ncome, you will need to pay self-employment taxes, but that does give you credit for Social Security
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Tax Professional: Carter McBride, Certified Public Accountant (CPA) replied 4 months ago

Hey! I just wanted to follow up and see if you have any other questions. If not, please leave a rating. Thanks!

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