Claiming Home Office Deduction Getting A Whole Lot Easier
Taxpayers who work out of their homes have found it challenging in the past to determine their home office deduction for the Internal Revenue Service. In addition, the deduction is notorious for raising red-flags with the tax agency. However, the IRS claims that procedure will be simplified and less troublesome when filing taxes next year.
Home office deduction made easier
The process of deducting a room as an office in a home is really complicated, according to the IRS. That is why the procedure will be made easier.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
Section 280A of the tax code allows working class individuals to deduct expenditures for an office in a private home if the room is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer."
Used to be too challenging
Working class individuals had to fill out the 43-line Form 8829 to figure out what part of the home is actually deducted for the business. This was really complicated and took a lot of work.
Taxpayers can take up to $1,500 in educations and $5 for every square foot of space for the deduction in 2014.
The IRS says the form will even be much simpler to understand and to fill out. The Internal Revenue Service states the move will save small business and entrepreneurs 1.6 million hours a year in paperwork and record keeping.
Everybody happy about this
A trade group for entrepreneurs, The National Association for the Self-Employed, had passionate words for the tax code upgrade.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The changes will be put on 2013 returns filed in early 2014.
Home office deduction made easier
The process of deducting a room as an office in a home is really complicated, according to the IRS. That is why the procedure will be made easier.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
Section 280A of the tax code allows working class individuals to deduct expenditures for an office in a private home if the room is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer."
Used to be too challenging
Working class individuals had to fill out the 43-line Form 8829 to figure out what part of the home is actually deducted for the business. This was really complicated and took a lot of work.
Taxpayers can take up to $1,500 in educations and $5 for every square foot of space for the deduction in 2014.
The IRS says the form will even be much simpler to understand and to fill out. The Internal Revenue Service states the move will save small business and entrepreneurs 1.6 million hours a year in paperwork and record keeping.
Everybody happy about this
A trade group for entrepreneurs, The National Association for the Self-Employed, had passionate words for the tax code upgrade.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The changes will be put on 2013 returns filed in early 2014.
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