Can I claim a Home Tax Exemption from Running a Business from "Out of State"?

[Ajon]

Can I claim a Home Tax Exemption from Running a Business from "Out of State"?

What is the name of your state (only U.S. law)? Tennessee

I would like to start a home based business out of a property I own in Tennessee (The business would be incorporated in Tennessee) but ran partially out of Texas as I also have an apartment here in Texas. The business will be an internet business. My question is will I be able to file for Tax Credits on my taxes for the items I purchase for my home and additions/modifications I will need to build on my home if the business is partially ran out of Texas?

Please advise. Thanks.

 

[LdiJ]

What is the name of your state (only U.S. law)? Tennessee

I would like to start a home based business out of a property I own in Tennessee (The business would be incorporated in Tennessee) but ran partially out of Texas as I also have an apartment here in Texas. The business will be an internet business. My question is will I be able to file for Tax Credits on my taxes for the items I purchase for my home and additions/modifications I will need to build on my home if the business is partially ran out of Texas?

Please advise. Thanks.

You can deduct/expense any supplies or equipment that you need to purchase to run the business. However you need to be very careful about attempting to claim additions/modifications for an internet business. If valid, they would likely be depreciable rather than something you can expense/deduct.

 

[FlyingRon]

You won't have a problem with the home deduction based on the location issue.
The IRS has a huge publication on this subject: http://www.irs.gov/publications/p587/
You can DEDUCT from your business income for legitimate expenses including obligatory depreciation as Ldij points out.
Note this is not a TAX CREDIT (reduction from the tax obliged) but a reduction in what will become your adjusted income.

You need to be careful as to situs/nexus when it comes to state taxation issues however.

 

[davew128]

You need to be careful as to situs/nexus when it comes to state taxation issues however.

I don't see this an issue. IMO, the OP is a resident of TN. Until and unless this is a legal entity, all income will be taxable to the OP in TN. As TX doesn't have an income tax, there is no tax issue there and no foreign state credit issue with TN.

 

[FlyingRon]

I don't see this an issue. IMO, the OP is a resident of TN. Until and unless this is a legal entity, all income will be taxable to the OP in TN. As TX doesn't have an income tax, there is no tax issue there and no foreign state credit issue with TN.

Sales tax is a possibility, even in Texas. He didn't say what kind of business.

 

[LdiJ]

I don't see this an issue. IMO, the OP is a resident of TN. Until and unless this is a legal entity, all income will be taxable to the OP in TN. As TX doesn't have an income tax, there is no tax issue there and no foreign state credit issue with TN.

TN doesn't have state income tax either...so the issue of state income tax is moot.

 

[FlyingRon]

No PERSONAL income tax in TN. There's an corporate/LLC income (they call it excise) tax.

 

[davew128]

No PERSONAL income tax in TN. There's an corporate/LLC income (they call it excise) tax.

Also a corporate/LLC excise tax in TX.