Your Available Home Office Tax Deductions

Did you know that the number one mistake made by tax filers each year is the failure to write off deductions that they qualify for? By not being aware of what can be written off millions of people overpay their tax bills! This is especially true when it comes to people who work from home, so read up on what deductions you qualify for by regularly working from a home office.

Home Office Deductibles

Home offices apply to a home you own, home or apartment you rents, and any type of home.

It’s important to not that for your home office to qualify for deductions then it must meet a few standards. For example, the space must primarily be used to conduct business. This means that your spouse can’t use this space for crafts and your kids can’t use this area for computer games.

Now you can have an entire room for your office, or a part of the room, but make sure that the space has clear boundaries.

Also, you can use multiple rooms in your home office if you have a few employees or need the space to conduct business on a regular basis.

The space doesn’t have to be attached to your home, your office can be in a freestanding structure like a shed or garage, but again, the space must be used for business purposes only.

Your home office either needs to be the principal location of where you do your business or it must be the place where you regularly meet with clients. You can have other business locations.

If your home office is where you meet with clients then it has to include more than a few meetings a year. Be sure that you can prove that you regularly meet with clients there.

If you’re an employee and not a business owner you still may qualify for home office deductions. However, you must be able to prove that you regularly work from home and that working from home is for the convenience of your employer. Also, you can’t charge your employer rent or charge them any fees for the use of your home space.

Daycares operated out of your home don’t have to be used exclusively for business. Also, you may qualify for deductions if you use a portion of your home for storing inventory or records.

A few of the items that you can deduct include:

  • Mortgage or Rent
  • Utility bills (internet, energy, etc)
  • Repairs 
  • Depreciation 
  • Landscaping (If you regularly meet with clients at you home and need to maintain it’s appearance for business purposes) 

Generally to find out how much you can deduct for your home office you need to find out what percentage of your home is actually used for business. This is usually done by dividing the square footage of your office space by the total square footage of your home.

You aren’t granted the same deduction every year. You must qualify for and apply for home office deductions every year.

Also, like with anything tax related the IRS can audit you, so make sure your records are clear and up to date. To be safe you can include a photo of your home office to help prove that your home office is exclusively used for business. The IRS generally doesn’t audit for home offices as much as other deductibles, but the possibility is still there.

In case You Need More Time, Use ExpressExtensions

You might need a little longer to learn about what deductions you qualify for, if that’s the case pop on over to ExpressExtenions to get an extension on your tax filing deadlines. Our dedicated support team is always available to answer any questions you may have about filing an extension via phone and email.

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