Home office but no income ...

June --

I am an inventor, an indie 2 years, not inc'd yet.

I am just starting out, i.e. haven't actually made any money yet, but I've spent many hours designing, researching and developing my ideas (one of which I applied for a full patent). If I did not receive income can I deduct home office expenses?

Thanks,
Matthew
Golden, Colorado


Matthew,

As long as you are trying to make money in a business-like way you are a business and you may deduct business expenses. There are restrictions on home office expense. Theoretically you may take it as a deduction, however if you have a loss [more expenses than income] then you may currently deduct only the home office portion of mortgage interest and taxes. All other home office expenses must be carried forward, ready to be deducted when your inventions make you some money.

I assume inc'd means that your are thinking about incorporating. Don't do it until you've read my posts here business entity -- incorporation and here business entity -- LLC .

-- June