The home staging industry is currently experiencing incredible growth. If you’ve recently started a staging business, it’s important that you start building a relationship with a trusted tax professional.
Even if you have a bookkeeping or financial background, outsourcing to a professional will help you focus more on the business.
Here are three reasons why home stagers, especially those in their first year of business, should work with a tax professional:
1) Several permits and licenses are required to have a home staging business, all which have tax implications.
These can include, for example, a sales tax permit if you plan to sell taxable items and a resale certificate if you plan to purchase inventory that is resold to customers. A professional can also guide you through the tax implications of entity formation (ex: LLC vs. sole proprietorship vs. corporation).
2) The expenses of forming a business and the cost to “open the doors” need to be amortized.
There are rules in place that may allow you to expense some of the costs associated with entity formation and “opening up shop.” Specifically, up to $5,000 in your first year of business. A tax professional can help you maximize your return.
3) Furniture inventory needs to be depreciated.
The biggest investment home stagers have when starting their business is furniture inventory. It’s important to note, however, that while this is regarded as inventory by the industry it is not for accounting and compliance purposes. Rather, these items are fixed assets that need to be depreciated. A tax professional can guide you through several methods of depreciation to figure out which is best for your business and personal tax situation.
Click here to see how RESA® Partner, SMG can support your home staging business as a tax professional.
Silvia holds a degree in accounting, an Enrolled Agent designation from the Federal Government and is a Mastery level Profit First Professional Certification.
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