Claiming your home office on your taxes has been difficult. You’ve needed a separate form, separate receipts, utility estimations and expense estimations just for that room. But, starting in 2014 things might get easier come tax time. There will be a new form option for you to file.
Here’s a quick overview:
• There will be a simpler form to fill out that will allow you to claim $5 per square foot of the office, up to 300 square feet, that will be capped at $1,500 per year.
• The new form will be beneficial for those outside of a high-rent area, where typically claiming more than $1,500 will still be better served using the current, long form.
• The new form is expected to reduce red flags and audits.
However, the IRS hasn’t changed its requirements of what constitutes a home office. You must still comply with the following:
• Your home office area must be a separate space from the house and used regularly and exclusively for your business duties. However, it does not necessarily have to be sectioned off from the rest of the house.
• The business area in your home must be either your main place of business or where you meet or engage with clients or customers in the normal course of your business and perform management and/or administrative responsibilities.
For further information on current and upcoming tax information and tips, read further here:
Always consult with your tax accountant for full tax laws, deductions and advise.
Call me today about your or any of the wonderful home offices featured here.