Asheville Home Office

Are you a photographer or someone who works exclusively from home?  Maybe a doctor who does billing from home?  You should, if appropriate, consider taking the IRS’ Home Office Deduction on your tax return.  This deduction could lower your tax liability.  Please read below to understand this deduction.

Whether you are self-employed or an employee, if you use a portion of your home for business, you may be able to take a home office deduction.  Here are six things the IRS wants you to know about the Home Office Deduction.

1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:

     *     as your principal place of business, or

     *     as a place to meet or deal with patients, clients or customers in the normal course of your business, or

      *     in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.

2. For certain storage use, rental use, or daycare- facility use, you are required to use the property regularly but not exclusively.

3. Generally, the amount you can deduct depends on the percentage of your home used for business.  Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.

4. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

5. If you are self-employed, use form 8829, Expenses for Business Use of Your Home to figure your home office deduction and report those deductions on line 30 of Form 1040 schedule C, Profit or Loss Business.

6. If you are an employee, additional rules apply for claiming the home office deduction.  For example, the regular and exclusive business use must be for the convenience of your employer.

Links:

* Publication 587, Business Use of Your Home 

* Form 8829, Expenses for Business Use of Your Home 

* Form 8829 Instructions 

* Schedule C, Profit or Loss from Business 

* Schedule A, Itemized Deductions  

IRS CIRCULAR 230 DISCLOSURE:
Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.