QUESTION DETAIL
Related User
Votes
I recently registered a small entertainment company as an LLC in Oregon. I am curious about taxes and what sort of things are tax deductible. I have about 17 people on my cast to pay and many other start-up expenses. I am also interested in building a home dance studio for rehearsal space in my home. The home is paid off and i only pay property tax on it.
ANSWER
Expert Mark Anderson's Answer:
Your necessary and ordinary expense of doing business are deductible. You can deduct the wages. You will also probably need to get an EIN and do payroll for your employees or 1099 if they are contractors. Business expenses are the cost of an office, conducting business, mileage on your vehicle (you need to keep a written log), rent, utilities and other business expenses. Here is a link that provides information on business expenses:
http://www.irs.gov/businesses/small/article/0,,id=109807,00.html
If the studio is used only for business then you can capitalize it and depreciate it over the life of the asset. Also, on start up expenses you may need to capitalize and amortize the costs. If you use your home for your business then you can deduction the expense associated with your home. You can figure the total square feet of your home related to your studio space. You can then take this percentage of your utilities of your home. I would get some help from a local CPA and set up a good book keeping system to track your income and expenses of your business. I hope this answers your question.
