Home Studio as an Official Business

[billycar]

Curious if I have added taxation to my art studio ... making an unnecessary complication for me ...

I declared my studio a business a few months ago, partially because I wanted to hire an assistant from another country, and I thought it would help me get immigration things simplified.

As it turns out, permanent jobs for foreigners / aliens are pretty much only approved for those with advanced academic degrees, those who have already demonstrated extraordinary talents, and super models ...

Now I am being asked to fill out a tax form showing all my business equipment so the City can tax me.

Can I get away with only listing the 3 easels I have, all of which are at least 15-20 years old? Wouldn't they be considered "of no value" for tax purposes?

What have I gotten myself into ... nothing worse than thinking the government is coming into your studio to inspect ...

[Greg Long]

Bill, I'm not sure about the US, but here they tend to tax studios by a set rate per square foot.
If I were you, I would phone up and ask the form issuer for clarification as to what needs to be classed as business equipment.

[timelady]

Most capital expenses are deducted over 5 years, even in the USA I believe? I haven't done US tax forms in a very long time... but not sure easels would have much value - at most probably a wholesale price (half retail) of what you original purchased them for. But at this point I'd say they have no value, especially since they are personal property purchased long before your business started. I would also phone and ask exactly what they're looking for. Are they trying to charge you property tax? Income tax? Recoup past sales tax? There's so many levels of taxation for a self employed person in the USA (city, state, federal, employee). Perhaps see if your local Chamber of Commerce or a small business coalition of some sort could advise you?

Tina.

[kasunart]

I've declared home studios in different states and they've never taxed me for value of things in the studio. I think they're trying to figure out if you have hazardous materials in storage and zoning for parking, etc. What they really are doing is just the first step in establishing your business (they may charge a fee for a license) so they can make sure you're collecting sales taxes. However that's usually a separate process to get that sorted out, and these days it's easily done on the web. Just make sure you file each month or quarter (even if 0, I do that with many states) otherwise you'll find a big late fee bill down the road. Filing sales taxes is usually pretty easily done on the web too.

[downriver]

If the tax form is for "personal business property" then simply list your equipment and the year it was purchased, and the amount. It sounds like the equipment is small and depreciated out if it is so old. I'm guessing that they are asking for the value, when the equipment became a business asset. It may belong to you personally, and only be used by the business. Talk with your tax preparer, for a few minutes.

Or, the tax office which gave you the form can give you a lot of advice and are happy to help. They don't want you to list items incorrectly, they will advise you. Some town ordinances don't tax the first 300.00 of value.

I remember you earlier post about the studio assistant. If you are disabled, in poor health, or elderly, your community may have some home care programs available. My community does. The program pays for someone to come in twice a week and help with house cleaning, laundry, errands, meal prep, driving to appointments, and offer a little companionship, items the client can't do by themselves, etc. They work to see that the client and caregiver are a good match. Why don't you look into it, it may provide a little help.