Home Office Deductions

In recognition of the holiday season, we recently decorated two Christmas trees that we have placed in the office. We also have seasonal decor displayed along our workstations just to make the scenery a little more festive for this time of year. If you’ve recently been to a doctor or dentist office – anywhere, really – since the beginning of December, you’ve probably seen the same type of holiday decorations.
For those of you with a home office, you might be following the same tradition of seasonal decorating. But decorating isn’t all you can do with your residential workspace. If you haven’t heard yet, there is an easier way to file for home office tax deductions. Introduced during the 2013 filing season, the Simplified Method Worksheet within Schedule C of Form 1040 and 1099-MISC greatly reduces the amount of information required to file.

Unlike the regular Form 8829 for claiming home-office deductions, the simplified worksheet only needs to calculate $5 per every square foot of your workspace – up to 300 square feet, which maxes out at only $1,500. The major benefit of this simplified method is that it requires little-to-no record keeping; however, that’s about the only good thing.

If you have a substantially large home office, or a great deal of expenses related to working from home, then you won’t be receiving the full deduction amount. It really all depends on what is more important to you – money or time. The best thing is that you don’t have to be committed to the same method each year; you can interchange how you deduct as often as you want.

House Rules
Now before you go designating spaces within your house as a home office, there are tax rules that must be met in order to consider your workspace as tax deductible.

For Business Owners:

  • A Home office has to be regularly used for business only. Any personal use will forfeit the tax deduction. It doesn’t have to be an entire room; a portion can work as long as it’s meant for business only.
  • Home office space must be used as your primary place of business. You can still do business outside your home, but a substantial amount has to be done regularly in your home workspace.

For Home Employees:

  • You have to meet the same requirements as business owners, and you must also prove that your home workspace is for the convenience of the employer and not for yourself.

More information about deducting your home office can be found with your local tax professional or the IRS Publication 587.

Don’t forget that if you need more filing time to get all your deductions together, you can receive a tax extension within minutes with ExpressExtension. We offer support for business, personal, and exempt organization tax extensions. Our friendly support team of live professionals in Rock Hill, South Carolina is more than excited to lend a helping hand with your e-filing experience.

If you have any questions or concerns about e-filing, please call us at (803) 514-5155 Monday through Friday from 9 a.m. to 6 p.m. EST. You can also reach us at any time of day with our 24/7 email support at [email protected].

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