Home Office Deduction

(redirected from Home Office Deductions)

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 ?
"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."
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.
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.
213, an accountant who provided bookkeeping and tax return preparation services was not entitled to home office deductions she split between her two residences.
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.
KFRN-AM in Long Beach interviewed Melody Thornton regarding home office deductions Aug.
(For more information about home office deductions, see www.irs.gov/uac/Work-From-Home%3F-Consider-the-Home-Office-Deduction.)
From handling vehicles and travel, meals, and inventory to claiming business losses and legitimate home office deductions, these important guides explain all the basics.
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.
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.
Notable regulatory barriers include complex IRS rules on home office deductions and the complicated test for determining independent contractor status.