TAXSMITH, LLC – Do You Work From Home? Home Office Deduction

TAXSMITH, LLC – Education Credits
March 17, 2013
TAXSMITH, LLC – What To Do With Foreign Income When Filing Taxes?
April 17, 2013

TAXSMITH, LLC – Do You Work From Home? Home Office Deduction

If you use part of your home for your business, you may qualify to deduct expenses for the business use of your home. Here are six facts from the IRS to help you determine if you qualify for the home office deduction tax relief…

1. Generally, in order to claim a deduction for a home office, you must use a part of your home exclusively and regularly for business purposes. In addition, the part of your home that you use for business purposes must also be:

– your principal place of business, or

– a place where you meet with patients, clients or customers in the normal course   of your business, or

– a separate structure not attached to your home. Examples might include a studio, workshop, garage or barn. In this case, the structure does not have to be your principal place of business or a place where you meet patients, clients or customers.

2. You do not have to meet the exclusive use test if you use part of your home to store inventory or product samples. The exclusive use test also does not apply if you use part of your home as a daycare facility.

3. The home office deduction may include part of certain costs that you paid for having a home. For example, a part of the rent or allowable mortgage interest, real estate taxes and utilities could qualify. The amount you can deduct usually depends on the percentage of the home used for business.

4. The deduction for some expenses is limited if your gross income from the business use of your home is less than your total business expenses.

5. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct. Report your deduction on Schedule C, Profit or Loss From Business.

6. If you are an employee, you must meet additional rules to claim the deduction. For example, in addition to the above tests, your business use must also be for your employer’s convenience.

The tax attorneys at Taxsmith, LLC at here to answer any and all questions that you may have whether or not it applies to home office deductions or something else. We will help you resolve IRS tax debt problems through the expertise of our income tax lawyers. Please contact us directly at 888.741.0272 or at info@taxsmith.com. We look forward to battling the IRS with you as your Tax Burden Rescue Team!