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.

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"There are many opportunities for taxpayers to perhaps fudge these numbers, which include underreporting income and overstating deductions such as home office deductions and other office-related expenses."

4 ways to get audited

Some taxpayers may endeavor to shift property taxes to business entities where the restrictions do not apply, and other might consider claiming home office deductions to obtain more deductions.

How the Tax Cuts and Jobs Act Might Change Estate Planning

These audits might be more far-reaching, or the examiner might want to check on something specific, such as home office deductions you've claimed.

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213, an accountant who provided bookkeeping and tax return preparation services was not entitled to home office deductions she split between her two residences.

Individual taxation: recent developments

The IRS said that for tax year 2011, the most recent year for which numbers are available, more than 3.3 million people claimed nearly $10 billion in home office deductions using Schedule C.

New tax law will whack some filers

* "IRS Offers New Method for Home Office Deductions," July 2013, page 30

Buckle up for tax season: take stock of tax year 2013's new and changed provisions, including several for higher-income taxpayers

KFRN-AM in Long Beach interviewed Melody Thornton regarding home office deductions Aug.

Members in the news

(For more information about home office deductions, see www.irs.gov/uac/Work-From-Home%3F-Consider-the-Home-Office-Deduction.)

Taking advantage of homeownership: Rufus and Jenny Triplett make one smart move after another

From handling vehicles and travel, meals, and inventory to claiming business losses and legitimate home office deductions, these important guides explain all the basics.

Nolo Press

Chapters cover landlard tax classifications, deduction of operating expenses, repairs, depreciation, interest, start-up expenses, home office deductions, car and local transportation expenses, travel expenses, hiring help, casualty and theft losses, additional deductions, vacation homes, deduction of rental losses, record keeping and accounting, Schedule E, and claiming deductions for prior years.

Every landlord's tax deduction guide, 3d ed

Even though the government loosened restrictions on home office deductions in 1999, make sure you can substantiate that business area of your home if asked.

IRS gearing up for big increase

Notable regulatory barriers include complex IRS rules on home office deductions and the complicated test for determining independent contractor status.