DK asked:
Do I need a local permit to do programming consulting work at home? I don’t expect any visitors. I just want to use the home office to do programming work and want to deduct some tax. Thanks.
Tags: Work at HomeDo I need a local permit to do programming consulting work at home? I don’t expect any visitors. I just want to use the home office to do programming work and want to deduct some tax. Thanks.
You wanted to say ” I want to save some tax ” ? Assuming this to be the intention , I may inform you that there is absolutely no need to have a licence to start business on a small scale . This is about India . I do not know about the rules in the country you are living . But it should be allowed without a permit . If the permit does not cost you anything , better have it. I would suggest even paying fees –to get the local permit —if it is not big enough .
You can check in the phone book’s gov’t page under licensing to determine if your locale will require a license. As for the home office deduction - this is one of the IRS’s biggest flags on returns. In order to use a home office, the ‘office’ must be used exclusively for business. You cannot place a home office on your tax return if you business is run out of your den, your living room or from your dining room table. It must be used exclusively for the conduct of your business, and strangely as it may seem, if you choose to do your personal banking or web surfing from that room, you immediately disprove the allowance. IE: you have a spare bedroom that you can convert into an office. Wonderful, then remove the bed, cause once you have a guest, it is just a space in a spare room. However, you can use that space as your home office on your tax returns. The secret is this: You need to measure the size of the ’space’ or room you have dedicated to your home office and prorate that to the rest of the house. If the space or room is 5×5 and the rest of the houe is 10×10 then you need to figure the percentage of the house that is taken up by the space/room. which in this case is (i think) to be about 25% (5×5 being 25, and 10×10 being 100). If I figured correctly, then you may ONLY deduct 25% of your homes utilities, (light, heat, water, sewer or septic, etc) rent or mortgage, insurance and what other expenses you may have for your house.
I would visit the IRS’s website and find out more by searching ‘home office deduction’ or ‘business use of the home’. Publication 587 is the one you want.
hope this helps - good luck with your business.