Don't overlook your home office

If you use a portion of your home for business, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting, and repairs.


You may claim this deduction for the business use of part of your home only if you use that part regularly and exclusively:

  • As your principal place of business for any trade or business; or
  • As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business.

Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses. The percentage of your home used for business is based on either the total number of rooms or square footage. If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

If you are an employee, you have additional requirements to meet. The regular and exclusive business use must be for the convenience of your employer. This means you are not allowed a home-office deduction if your employer does not require you to work at home.

Tax Tips Small Business

  • Turning Interest Payments Into Tax Deductions

    Make interest payments work for you, not against you

    You can deduct business-related interest on your business return if you used the borrowed funds to purchase business supplies, equipment, services, etc. Co-mingling business and personal expenses makes it difficult to determine what amount of the interest is business versus personal. If this happens, the IRS may consider the entire amount as nondeductible personal interest and disallow the deduction. Therefore, keep all business purchases made with loans and credit cards clearly separate from your personal expenses. Use a separate credit card for your business to make it easier.

    Read more ...

Small Business Quick Tip

  • Like Kind Exchange

    If you are disposing of property used in your business, you may want to consider a like-kind exchange to defer the taxable gain on the sale.
Tuesday, 24th October 2017
EASEAL_L

What is an Enrolled Agent and why should I care?

Click Here to find out

 

NATP Member

Follow us on

TwitterFacebook

Tax Tips Personal

  • Summer Day Care

    What expenses qualify for the childcare credit?

    Parents who have children under the age of 13 are allowed a tax credit for childcare expenses paid so they can work. In the summer, many parents send their children to a structured day camp or an overnight camp for a week or two at a time. In most cases, the cost of sending your child to a camp of this nature does not qualify as a childcare expense, even if one of the reasons for sending the child is for care.

    Read more ...

Personal Quick Tip

  • Mileage Rates

     

    Beginning January 1, 2016, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:
    • 54 cents per mile for business miles driven;
    • 19 cents per mile for all miles driven for medical or moving purposes; and
    • 14 cents per mile for all miles drive for charitable purposes.