2 questions - home office & employee pay - Tax Forum - Tax Help Forum, Payroll Tax Forum, Business Tax Forum, Tax Questions, Free Tax Advice

peaceablegarden · 02-02-2010, 08:34 PM

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Hello,
New here. Thanks in advance for the help. Just a little background... I have been self employed, sole proprietorship (nonprofit management/consulting) for over 10 years. I have always had a home office and do all my work here. I rent my home. My business, like many others, is doing poorly in this economy.

Question 1 - (2 parts) I noticed this year that if I do not show the rent and utilities for my home, my return is greater. I'm confused by this, but the question is do I have to show that I paid rent/utilities? And if I don't, what could it potentially mean for filing in the future with regard to my home office?

Question 2 - First I noticed it this year using Turbo Tax, it asked me if I had paid any employee wages. Do I consider myself an employee? Obviously I pay myself and I'm the sole employee of my company.

Thanks again!

Blacklight · 03-05-2010, 02:03 AM

you must state all of your expenses in your income tax return, so that you can maximize your return. and you wont be having any trouble in the future.

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skier_j · 03-05-2010, 02:07 PM

are you by any chance in an Earned Income Credit situation??

almost sounds to me like one of the refundable credits is being reduced by less net income from self employment....

and NO you are NOT and employee of your sole proprietorship.