home office for startup

Forum|Forum|3 years ago
November 16, 2022
1 reply
17 views

I'm retired in the Midwest, but a California startup recruited me for marketing director. I am only paid in stock, which I purchased for nominal fee, that we hope will gain value next year. So I am out-of-pocket significant expenses for travel, computing technology and printing supplies. Thank you in advance:

• As my principal place of business, can I deduct some of home office costs?

• Where can I research how this stock-as-salary value gain/loss should be reported?

Nancy M5

Level 4

The deductibility of home office expenses would depend on whether you are considered an employee or self-employed. And that is a legal question, rather than a tax question. Do you have a contract with this California start-up and does the contract indicate that you are an employee or independent contractor? Here are three articles that may help in this determination:

If you are an independent contractor then you can probably deduct home office expenses. This space must be your principal place of business and you must use it exclusively and regularly for business. The Home Office Deduction explains these requirements in more detail. And Setting Up a Home Office walks you through how to calculate the deduction and what expenses to include.

The market value of the stock at the time you receive would be considered your income. This is known as Equity Based Compensation. If you're considered an employee the information you need to complete your return will be included on Form W-2. If you're considered an independent contractor than you should receive Form 1099-NEC.

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