CEO and Founder of Kruze Consulting
We’ve seen a few startups rent a 4 bedroom house under the name of their startup as opposed to their personal names, believing that they could deduct the entire cost through the startup, hence allowing the whole team to save thousands in personal rent. It does not work like that. The IRS cares a lot about these types of arrangements because it can miss out on significant payroll tax revenue because the employees are receiving a free fringe benefit.
For tax purposes, you can only deduct the pro rata percentage of your live/work space that is used both regularly and exclusively for work purposes.
The Qualifications: your live workspace must be….
You are not saving money by opting for a live / work space. Save your sanity and go for WeWork office where you can get work done, mingle with other offices, then go home to a work-free sanctuary.
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