LLC

[Luis Rodriguez]

hello everyone . I am about to close on my first deal and I am planning on taking this to the next level by forming an llc and creating a business plan . My question is , since I will have an llc , will my home be considered an office ? Will that cause any problems in relation to taxes and such . Thanks in advance!! 

[Robi Hawley]

If your goal is to protect your personal assets and segregate your investments then use a combination of LLC's and not an S-Corp. If faced with a lawsuit any halfway decent attorney will be able to easily pierce the corporate veil on an S-Corp that is not professionally managed. You will then have paid much more in fees over the years and reap no benefits.

As for your office deduction, if you are using an accountant to do your taxes (not a bookkeeper or chain tax prep service) then take the deduction. If the person preparing your return DOESN'T advise you to take it or says it is risky then walk out and find a real accountant. The accountant will easily handle the depreciation aspect when you sell your home and with the vast majority of primary home sales the depreciation does not even enter the picture. Home offices stopped raising red flags years ago. Recognizing the huge increase in home-based offices and businesses, the IRS even simplified the deduction in 2015 to allow more at home workers to claim it. You can claim $5 a square foot, up to 300 sq. ft. and not have to calculate every single utility, expense etc. per portion. A good accountant is one of the best investments you can make in your business, what they save you will more than cover their fee.