home office deductions | TaxConnections

15 Sep 2021

Small Business Owners And Home Office Deduction

Small business owners should see if they qualify for the home office deduction.

Many Americans have been working from home due to the pandemic, but only certain people will qualify to claim the home office deduction. This deduction allows qualifying taxpayers to deduct certain home expenses on their tax return when they file their 2021 tax return next year.

Here are some things to help taxpayers understand the home office deduction and whether they can claim it:

Employees are not eligible to claim the home office deduction.
The home office deduction, reported on Form 8829, is available to both homeowners and renters.
There are certain expenses taxpayers can deduct. They include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent.

Written by TaxConnections Admin | Posted in Home Office Deduction • Remote Worker Taxes

24 Sep 2020

IRS Reminds Taxpayers Of The Home Office Deduction Rules

During Small Business Week, September 22-24, the Internal Revenue Service wants individuals to consider taking the home office deduction if they qualify. The benefit may allow taxpayers working from home to deduct certain expenses on their tax return.

The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy. However, the Tax Cuts and Jobs Act suspended the business use of home deduction from 2018 through 2025 for employees. Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home.

Qualifying For A Deduction

Written by IRS | Posted in Home Office Deduction • IRS Notice

07 Aug 2020

Here’s What Taxpayers Need To Know About The Home Office Deduction

The home office deduction allows qualifying taxpayers to deduct certain home expenses on their tax return. With more people working from home than ever before, some taxpayers may be wondering if they can claim a home office deduction when they file their 2020 tax return next year.

Here are some things to help taxpayers understand the home office deduction and whether they can claim it:

• Employees are not eligible to claim the home office deduction.
• The home office deduction Form 8829 is available to both homeowners and renters.
• There are certain expenses taxpayers can deduct. They include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent.
• Taxpayers must meet specific requirements to claim home expenses as a deduction. Even then, the deductible amount of these types of expenses may be limited.
• The term “home” for purposes of this deduction:
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Written by IRS | Posted in Internal Revenue Service

01 Jul 2020

IRS Rules On Home Office Deductions

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes.

Simplified Option
For taxable years starting on, or after, January 1, 2013 (filed beginning in 2014), you now have a simplified option for computing the home office deduction (IRS Revenue Procedure 2013-13, January 15, 2013). The standard method has some calculation, allocation, and substantiation requirements that are complex and burdensome for small business owners.

This new simplified option can significantly reduce the burden of recordkeeping by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses.

Regular Method
Taxpayers using the regular method (required for tax years 2012 and prior), instead of the optional method, must determine the actual expenses of their home office. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.
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Written by IRS | Posted in Home Office Deductions

01 Jul 2020

Home Office Deductions: What Can You Deduct From Home Office Expenses

Home Office Deductions in the Age of Covid-19

With so many taxpayers working from home–some indefinitely–do to Covid-19, many are likely wondering whether they can deduct their home office expenses. In short, traditional W-2 employees cannot deduct their home office expenses regardless of whether they would otherwise qualify for the deduction. The 2017 tax reform legislation eliminated this deduction for 2018-2025. Self-employed taxpayers can deduct expenses associated with maintaining a home office if the office is used regularly and exclusively as the taxpayer’s principal place of business (if the office is within the dwelling unit). A home office deduction is permitted for self-employed taxpayers with separate structures if the office/workspace is used “in connection with” the trade or business. For more information on the home office deduction, visit Tax Facts Online.

When is a taxpayer entitled to deduct expenses incurred in maintaining a home office?

A taxpayer is only entitled to deduct expenses for a home office if the taxpayer is able to meet the restrictive requirements imposed by the IRC and the courts with regard to this business deduction. A deduction for use of a part of the taxpayer’s residence as an office will not be allowed unless a portion of the dwelling is used exclusively and on a regular basis as (a) the principal place of business for any trade or business of the taxpayer; or (b) the place of business used by the taxpayer for meeting patients, clients or customers in the normal course of the taxpayer’s business.1 If the taxpayer uses a separate structure as a home office, the use requirements are less restrictive and the use must only be “in connection with” the taxpayer’s trade or business.2 A home office will qualify as a taxpayer’s principal place of business if both of the following are true:

Written by William Byrnes | Posted in Home Office Deduction

12 Jan 2018

Working From Home? Claim Your Home Office Deductions

Some of us are quite lazy to drive/ride to work every day, so we prefer to set up office at home. Well, jokes apart, some of the small business that operates right out of their homes qualify for deductions. But the fear of audit keeps them away from any such declarations. But in all fairness, if it is genuine and you deserve it, there are no reasons as to why you should not aim for it.

The following are some pointers that you should keep in mind before proceeding with claiming home office deductions. Read More

Written by Nanda Kumar | Posted in Home Office Deductions • TaxConnections