Home Office Tax Deductions. Thanks for the visit. Moreover, I hope this article will lead to bettering your tax savvy so you can take full advantage of the tax laws as they pertain to Home Office Tax Deduction in the U.S. During my research on the topic, the rules are clear-cut and overall easy to claim your Business Tax Deductions.
Affiliate Disclaimer: I get commissions for purchases through links in this post.
There are more than 18.3 million to 38 million home-based businesses in the United States according to the U.S. Census, and there are rules you have to apply for a home office tax deduction. The deductions are really advantageous for the home business entrepreneur. Along with having the comfort of your home as your place of business, the tax deductions offered should further your quest to having success with a home business.
Home Office Tax Deductions
A home-office tax deduction is determined by the depreciation percentage (10%), for the office space, the utilities, and insurance used by the home office. If a home has 2000 square feet, then the home office has 200 square feet that are deductible.
To find how much of the home expenses are tax deductible, measure the square footage of the work area, and divide it by the square footage of your home. All expenses directly related to the home office are fully deductible. “Business Use of Your Home” Publication 587 by the IRS can be found at http://www.ustreas.gov.
That will be the percentage of rent, mortgage, insurance, utilities, housekeeping, etc. that you can claim. Moreover, your home office must be dedicated to your business. Auto maintenance and mileage deductions can be calculated either by standard mileage rate or actual expenses (such as gas and maintenance). Use the method that results in a larger deduction.
The Deductible Dozen
- Home office
- Office supplies
- Other equipment
- Software and subscriptions
- Travel, meals, entertainment, and gifts
- Insurance premiums
- Retirement contribution
- Social Security
- Telephone charges
- Child labor
- It’s helpful to take a photo of your room and keep it with your tax records.
- As with any use of a vehicle, keep a record of your business driving as required by the tax law.
- You can’t choose to claim depreciation you’re entitled to because you’ll still have to recapture it on a sale, so you might as well deduct depreciation when you can.– The Huffington Post/AOL Small Business | By Barbara Weltman
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See You On The Other Side
Thanks for stopping by. I wish you the best when making your home office tax deductions, and with your online business, may you have blessings and prosperity. Please, let’s communicate, share a comment or question and I will get back in touch with you.