Just wondering if anyone deducts their home office. I never did since my old accountant told me not to along with my other business expenses. until I started making some money to offset it. In hindsite I realize this was wrong and now it's too late to deduct those expenses.
In doing some research I read that it may be a red flag to deduct your home office so I am unsure what to do about it. My home office is strictly an office, thinking of taking photos just in case.
I also file my taxes using Turbo Tax which I love since the end result is exactly the same as when I had my taxes professionally done. But instead of the personal software I am thinking of using the business software this time. Appreciate any feedback. Thanks!
Let me first say that I am NOT a tax professional. I don't want to mislead anyone. I have used the business version of Turbo Tax since I started my company in 2006. I deducted my office and biz expenses. It calculates the utility deduction based on the percent of space your office takes up in your house. Each year I look at the chart Turbo Tax has that shows your chances of being audited after you file your taxes. My chances are higher than the average person that doesn't have a business, but it's still nothing compared to most.
Hope this helps!
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Carol Mikel
Precision Secretarial
Hi JoCarole,
I agree with Carol. I used the business version of Turbo Tax last year and deducted the same items she listed. I believe it's a good alternative to hiring an accountant.
Hi JoCarole,
I agree with Carol. I used the business version of Turbo Tax last year and deducted the same items she listed. I believe it's a good alternative to hiring an accountant.
I am NOT a tax professional, and agree with JoCarol as well. You can deduct for exclusively used space - must be separate and only used for the business; if the family uses a comuter in there or its part of a den it might be questionable. Also, and many over look this rule, you can deduct space used for storage as part of your business and this does not have to be exclusive - such as part of your basement. If you do not have a space that is completely separate with its own entrance and utilities don't use the home depreciation deduction that's what really gets people in trouble.
We do take the deduction but we have a tax accountant who works out the details for us. His services are a deduction and the amount he saves us each year pays his fee and then some. As a small business I'm going to take all of the deductions legally allowed, without question.
Thanks to all who commented, appreciate it. Tess thanks for this link, with all the books I buy, I never thought of a tax book. Always good to have for reference!
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Re: Home office deduction anyone?
I'll preface this by saying that I am a tax professional with 10 years' experience (I manage a franchise of Liberty Tax Service owned by my family here in Florida). I just want to be sure you all know that if you are deducting a home office in a home you own, that means you are declaring that portion of your home as business property and are depreciating it. When you sell your home, you will have to recapture that depreciation (and possibly pay taxes on the gain). You won't be able to take the full exclusion of gain even if you otherwise qualify. Just wanted to put in my .02 for what it's worth.
Home office deduction anyone?
and the amount he saves us each year pays his fee and then some. As a small business I'm going to take all of the deductions legally allowed, without question.
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