Taxes and insurance issues with a home business.

Setting up a home office to run your landscaping business can be a very helpful step to facilitating growth, but what should you do when it comes to taxes and insurance? In this discussion from the Gopher Lawn Care Business Forum, we hear from a number of entrepreneurs who have gone through some traumatic experiences and learned some strong lessons when it comes to home offices. Hopefully their experiences can help you business growth.

One lawn care business owner wrote “I am looking at moving into a new home, but I never considered any space as an office to write off for taxes. Can anyone explain how this works? Does it go by square footage? What about insurance for a home business? Any insights into that? I’d be paying $1,500 monthly for this house, the office would take up the entire basement living room which I still have to measure out. Can my parking/garage/shed, be a business write off too?”

A second lawn care business owner responded “from my understanding of the tax law, it is based on the square footage of the office space. Your office space is technically only allowed to have business related items in it. If it’s your office, you can’t have a storage area/shelves for non business stuff in it. I deduct for my home office as well as half of my garage space. You can deduct a portion of your utilities as well.”

A third shared “I have an accounting degree but make sure you ask your tax accountant about this. Also, have a talk with your insurance agent. Homeowners policies generally do not cover business items such as computers and such when they are in the home. Your insurance agent can help you get the right coverage for the space. I learned this the painful way after a hurricane hit my home and my business space was ruined.

A few years back, I had a huge storm come through. The remnants of hurricane converged with a Nor’Eastr and slammed into my area. A room on the side of my home was used for business only. Displays, seating, supplies, etc. were destroyed by water damage and broken glass. It was a mess. When the insurance agent came to check out the damage, we were shocked to find that the entire contents of the room were uncovered as they were legally business property and excluded from coverage. The damage to our property was so significant that I was essentially out of business temporarily. A neighbor’s tree also fell and destroyed my newly completed workshop, a large shed, and the swimming pool was destroyed during clean-up as well. I was unprepared for this.

As a result, I had to depend on the kindness of others to recover. I was unable to acquire more coverage after the disaster and was left totally uncovered when another hurricane hit in Aug of the following year.

From all this, I have learned that an oversight and misunderstanding can really cost. The legacy of that disaster is still following me. Make sure your agent is adept at working with businesses and fully understands what equipment you have, who uses it, and where it is stored.

It may sound foolish, but now I try to ask lots of questions, even if I think I understand. I get everything in writing and do tons of research. I would rather they think I am a bit dense than end up paying out huge amounts of money when I could be covered.

Hopefully this won’t happen to someone else.”

Read more about Lawn Care Business Bidding Tips, Upsells, And Disasters To Avoid. Learn how to improve your bidding process with this lawn care business book and be prepared before hand by knowing what you should be looking out for before a problem occurs.ā€¯

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