Home Office Deduction

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Home Office Deduction

A reduction in one's taxable income for the expenses of maintaining a home office. For example, a self-employed person may deduct the costs of office supplies, depreciation on one's computer and similar expenses. Likewise, one may deduct a portion of one's rent or mortgage for an office space used exclusively for business purposes. However, the amount deducted must be proportionate to the office's size relative to the home. Employees who work from home are eligible for the same deduction under the same restrictions.
References in periodicals archive ?
However, if you create a separate company to prepare a manual that you sell to your clients, and do this work from home, the revenues from that company may be offset by home office deductions.
Home Offices -- Home office deductions are a red flag.
The American Institute of CPAS endorsed a bill (S 1924) that would liberalize home office deductions.
Congressional concern was that the Supreme Court's decision effectively closed the door to legitimate home office deductions for many taxpayers and unfairly penalized small businesses simply because they operated out of a home, rather than from a storefront, office building or industrial park.
See JofA, "Lifting the Cloud on Home Office Deductions," July 91, page 41, for a review of home-office cases.
Record-keeping is particularly important for taxpayers who work at home, since the IRS now requires you to fill out a separate form for home office deductions, and is cracking down on improper use of this deduction.
This new rule merely prevents unfair denial of home office deductions to a growing number of taxpayers who manage their business activities from their homes.
Home office deductions takers beware: The IRS recently issued new guidelines (Revenue Ruling 94-24) which severely limit home office deductions.
889521JA) is a six-panel brochure explaining general rules for determining home office deductions.
This provision affects real estate investors and taxpayers who rent out a portion of their homes or claim home office deductions.
63) See Joint Committee on Taxation, Law and Proposals Related To Subchapter S Corporations and Home Office Deductions (JCS-16-95), 5/24/95, Table 3.
Commissioner), there was a major breakthrough on home office deductions.