The Internal Revenue Service has
introduced a new, simplified method for taxpayers to use when calculating their
home office deductions. The new simplified option allows you to deduct $5 per
every square foot, with the maximum square footage of the home office being 300
square feet, for a maximum deduction of $1,500. Through this simple option,
there is no need to identify or calculate the actual expenses that will be
attributed to the home office.
The simplified deduction is much
easier to calculate than the older expense method, which involves filling out
Form 8829 and listing each and every expense calculated from your monthly
expenses for the home.
Whichever option you decide to
pursue, there are requirements that must be met.
·
There must be a room in your home that is
dedicated exclusively to work. This space cannot be shared for other purposes.
This room must be regularly used exclusively for work purposes.
·
Your home office must be the only work place you
have. If you have an office outside of your home where you can work, you will
not qualify for this deduction.
·
If you receive reimbursement from your employer
or an expense allowance for your home office, you are not eligible.
The simplified deduction requires
less time and effort than the traditional method, but may produce a lower
amount available for deductions.
Linked below are websites with
more information regarding the options for calculating home office deduction:
If you have any questions about
home office deductions and your options, please contact us.
518 Arbor Hill Rd.
Kernersville, NC 27284
Ph: 336-996-3338
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements
imposed by the IRS, we inform you that any U.S. tax advice contained in this
communication (or in any attachment) is not intended or written to be used, and
cannot be used, for the purpose of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed in this communication (or in any attachment).
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