Have good thing about the home office deduction allowed by the IRS.
Did you know that about fifty percent of your income goes to paying taxes? This really is driving myself nuts because I avoid think we realize how much taxes cost all of us each year. CTFO
I’m on this subject lately because I met with my CPA recently to end last year’s taxes – finally. Our company is also planning next year’s tax strategies. Since I now work from home full time We wanted to find out more on the home office deduction.
A mentor of mine once said: “It is irresponsible and sloppy stewardship of your money if you don’t educate yourself on taxes. inches
You can reduce the amount of taxes you pay each year by taking benefit of the home office deduction allowed by the IRS.
According the IRS:
Your home office must be used exclusively and regularly. It must be your principle office where you meet clients and conduct your business.
Put simply, your home office must become a place in your house that is employed for business only. It might not exactly be used for personal or family activities, or activities not associated with your business.
The home office must be used regularly not merely occasionally. Assuming your home office deduction meets the requirements given above you will be able to deduct a section of the utilities, fees, rent, mortgage interest, and depreciation based on square feet size of your office versus. your home.
For instance , the office space at home is two hundred square feet. Your home is 2000 square feet. These kinds of numbers would allow you deduct 10% of the utilities, taxes, rent, etc .
There are some items on the list above that can’t be deducted if you rent your home – like depreciation and mortgage interest.
Please check with your tax advisor to educate yourself about other tax deductions and take advantage of them!
Everyone has different circumstances and the tax laws change quickly.