Practical Upsizing Tips for Your Home-Based Business
By Amy Collett
The gig economy is steadily rising. The benefits of working from home (e.g., comfort, flexibility, time saved, etc.) are inspiring more and more entrepreneurs to start a home-based business. For many, however, there comes a point when their home simply isn’t able to accommodate
If you’ve realized that your home is no longer fitting for an adequate office, growing inventory, or new hires, there’s one solution to consider: upsizing. Moving to a larger home could solve your problems. But it’s essential to approach it the right way so that you can set your business up for success while living comfortably in the space. From figuring out taxes to working with the Shinabarger Team to equipping your office, here are some simple tips for upsizing your home
for a growing business:
Understand Your Taxes
Planning for your taxes is a great place to begin your upsizing journey. If you run a business out of your home (assuming you have a home office), there are tax implications — both benefits and consequences — that come with selling your home.
For example, if your office is located within your home, then you can qualify for the home sale tax exclusion. Here’s what that means: If you are single, or are married but file taxes separately, then up to $250,000 of all your business profit will not be taxable. If you are married and filing
jointly, on the other hand, up to $500,000 will not be taxable. Conversely, if your home office is detached from your home (e.g., in a separate garage or guest house), then you will need to pay
taxes on your business profits.
The legal structure you use for your business also plays a role in the taxes you pay. Forming an LLC, for instance, will provide several tax advantages, such as pass-through taxation, business deductions, and capital expenditure deductions. Along with the tax benefits, operating as an LLC will protect your personal assets and give you more flexibility than some of the other legal entities. If you decide to form an LLC Washington state has its own regulations, so make sure you understand what’s involved and consider hiring a formation service.
Determine What You Need
It’s also critical to decide exactly what kind of home you need for the next chapter of your life. Consider the square footage, number of rooms, city, neighborhood, and other factors that will help you thrive in both business and life for the foreseeable future. Once you have an idea of where you should live, research the local market to get a feel for property prices, then go over your budget to determine what you can afford. Virtually every step of the home buying process can go more smoothly if you hire the right real estate professionals. Don’t hesitate to call a reputable and experienced agency like the Shinabarger Team.
Plan for the Right Kind of Office
Finally, you want to ensure that your new home office is top-notch. Even though you’re working from the comfort of your own home, you still have to go to work each day and maintain productivity. Get a quality desk and chair. Invest in all the equipment and software tools you need to communicate, collaborate, and run a business efficiently in this day and age. Make sure you have adequate space to work comfortably and go the extra mile by decorating your office in a way that inspires you.
If your home-based business has outgrown your home, upsizing could be the solution. Remember to learn as much as you can about taxes before you make any moves, and figure out exactly what you need from a new home. Then, work out the financials and make sure your home office has everything you need to succeed in today’s business world. A strategic approach and good decision-making will go a long way in ensuring you and your business are positioned for long-term success.
Are you looking for elite real estate assistance for buying or selling a home? Contact Shinabarger Team today! (509) 947-8076