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The home office deduction under the actual or simplified method can't be used to create a net loss for the business.
In Strohmaier, (67) the Tax Court held that a part-time minister who was an independent contractor and not affiliated with any church could not claim a home office deduction because his home was not his principal place of business.
Benefits include the potential ability to expense the cost of equipment purchases, business travel, certain educational expenses and claiming a home office deduction for a home-based business franchise.
Congress has relaxed the rules, so a home office deduction is no longer a red flag, he says.
In other changes for the 2013 tax year, the Alternative Minimum Tax has been patched -- permanently -- to prevent more middle-income people from being drawn in, and there's a simpler way to compute the home office deduction.
An analysis of the home office deduction safe harbor.
are home-based, and many of them claim a home office deduction on their tax returns.
Be sure to make your claim reasonable, or it will get questioned; a $25,000 home office deduction for a business with $50,000 annual gross revenue is not reasonable.
To take a home office deduction, you'll need to figure the percentage of your home used for business.
Illustrating this growing fear and mistrust small-business owners have for the IRS, less than half (47 percent) of eligible small-business owners utilize the home office deduction, primarily due to concerns it will "red-flag" their return for an audit.
If you have a home office or regularly telecommute, the home office deduction has your name on it.
In summary, the home office deduction has effectively been taken away from most employees, especially those who are furnished an office on the business premises of their employers.

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