Friday Dec 02, 2022

I’m Now Running a Business From My Greenwich, Connecticut, Home. Are There Tax Implications? – Mansion Global

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Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.

Q. I’m planning on starting a business out of my Greenwich, Connecticut, home. Are there any property tax implications?

A. There is a property tax for business owners in Greenwich, Connecticut, according to Heather Smeriglio, the town’s tax collector.

Business owners fill out a Declaration of Personal Property annually, which they must file with the Tax Assessor’s office by Nov. 1, Ms. Smeriglio said in an email.

“The assessor places a value on the property and the tax bill is created by multiplying that assessed value by the mil rate set by the Board of Estimate & Taxation,” she continued. “Currently, the mil rate is 11.590.” 

More: What U.S. States Are Considering Property Tax Changes for 2022

The Declaration of Personal Property lists “all personal property items used (full or part-time) in the conduct of the business…and non-registered motor vehicles,” according to the form. That can include anything from tractors to filing cabinets to pinball machines.  

“These taxes are due July 1 of each year, but there is a 30-day grace period to pay without penalty,” she explained. After that, there’s a 25% late fee. 

Although taxes are due on these items, business owners in Connecticut, and throughout the U.S., who acquire new equipment or other property for their business can deduct the cost of those items—plus a portion of their expenses for a home office—from their income taxes, according to Ryan Losi, a CPA and the executive vice president of Piascik & Associates, an accounting firm with clients around the country. 


“Expenditures that were solely, 100% related to the home office would be allocable, meaning you would not take a percentage of the total, you would actually allocate 100% to the home office,” he said. 

In addition, expenses for the home office, including a portion of the mortgage, real estate taxes, utilities and other expenses, can be deducted from income taxes. However, the office must be entirely used for business. 

“There’s an exclusivity requirement,” Mr. Losi said. “It’s all or nothing…I try to emphasize that, and I tell clients to take a picture. Let me be able to see the room….you don’t want to see gaming stuff in there. You don’t want to see kids’ stuff in there. It needs to be an actual office, 100% of the time.”

Mr. Losi also noted these deductions are for self-employed individuals, not people that are employees of larger companies who are working from home because of the Covid-19 pandemic or other reasons. 

Click to Read Tax Experts Share Answers and Advice for Readers’ Pressing Tax Questions 

Email your questions to [email protected] Check for answers weekly at mansionglobal.com.

Source: https://www.mansionglobal.com/articles/im-now-running-a-business-from-my-greenwich-connecticut-home-are-there-tax-implications-01640261564

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