1. Would the deposit I pay on the business premises be tax deductible? It sounds like we need to pay a sizable deposit for business premises here (35% - 60% of the purchase cost), so this could be a significant amount of money.
based on number 2 at best these would be start-up expenses not deductible until the business actually opens or you abandon the venture. at worst these would be capital expenditures that would need to depreciated once the business begins. foreign real estate, excluding the cost of land which is not deductible at all, would be written off (depreciated) over 40 years once the business starts.
2. We are not able to open the shop yet as the premises are currently leased to a different business for a few more years. Would we still be able to claim expenses for the premises against taxes, either this year or in future years? Are there other steps we would need to take to show that we were setting up the business, or would we need to fully launch the business in the same year we bought the shop for it to count? Ideally we could have some way of counting it against the income this year, as most of my income is overseas and any savings wouldn't make much of a difference against US income in future years.
see above. expenses incurred before a business opens are not currently deductible. they are start up expenses. other than capital expenditures, depending on the amount they would either be written off or amortized once the business begins
3. Is this something I can do via TurboTax? I have used TurboTax for many years now to file my self-employment taxes (I am an author who earns royalties in the US) but have never dealt with something like this before.
there is nothing for Turbotax because of the above. also be aware since the start of the venture is a few years out, significant changes in the tax laws over the ensuing years could have a substantial effect. when it's time, your committed, seek professional advice.
