home office income tax deduction

home office income tax deduction

Schedule C Tax Tips: Are You Letting These 4 Myths Stop You From Taking The Home Office Deduction?

Are you afraid to take advantage of the home office deduction? Perhaps you are the victim of one or more of these common tax myths. Unfortunately, many self-employed folks shy away from taking the home office deductions for at least one of the following four reasons. 1. Fear of an IRS audit. There's been a rumor going around for years that the home office deduction increases the likelihood of an audit. I would love to know who started that rumor so I could give him a piece of my mind. For now, I'll just be thankful that you are reading this article so I can tell you: don't believe it! There is no basis for it. Treat the home office deduction like any other legitimate business expense: if you are entitled to take, by all means, take it. 2. Frustration over the record keeping requirements. Obviously, there are some numbers that must be compiled to take the home office deduction. For homeowners, they include the following: mortgage interest, real estate taxes, homeowner's insurance, utilities (gas, electricity, water, trash removal, etc.) and repairs. The first two are usually reported to you on your lender's annual Form 1098 statement. The utilities are easy to calculate by simply adding together your twelve monthly bills for each service provider; if you don't have those bills, the amounts are just a phone call away to your friendly utility company. And home repairs are easily found by looking through your checkbook register and/or monthly credit card statements. For renters, there's usually fewer numbers to crunch: the rent amount is the main figure, and I'm sure you know that without even looking it up. You also need any renter's insurance or utilities you paid. 3.The belief that it's not worth it. When you consider that there is likely hundreds or even thousands of dollars in tax savings at stake, don't you think this is time well spent? If it takes you an hour to put this information together, and you save $500, where else can you make that much money in that amount of time? Sure, I know how much some people despise paperwork and number crunching. Maybe you prefer not to touch a calculator with a 10-foot pole. If that's the case, hire an accountant to do your return and the extra tax savings from this deduction alone will likely more than cover the tax preparation fee. 4. A misunderstanding of the tax benefits. Have you ever heard a person say that he's not taking the home office deduction because he's already deducting mortgage interest and property taxes on Schedule A? Well, the next time you see your friend, dazzle him with this tax strategy wisdom: If you take the home office deduction, you not only reduce your income tax, but you are also reducing your self-employment (SE) tax. This is because the home office deduction reduces your Schedule C profit. For every $1,000 of home office expense, you are losing about $150 in SE tax savings.

About the Author

Looking for more small business tax tips? For a free copy of the 25-page Special Report "How To Instantly Double Your Deductions", visit http://www.yousaveontaxes.com . Wayne M. Davies is author of 3 ebooks on tax reduction strategies for small business owners and the self-employed.

¿Cuál es el promedio de reembolso de impuestos?

Sé que hay muchas variables a considerar la posibilidad en esta pregunta, pero me gustaría saber una cifra general acerca de qué esperar. Hago menos de 21.000 dólares / año. Espero conseguir un crédito por ingreso, así como las deducciones por mis dos hijos y una oficina en casa (sala utilizada exclusivamente para mi negocio Homebased). Estoy tratando de trabajar desde casa, así que puede darse el lujo de seguir dando a mi hijo Homebased tratamiento del autismo. ¿Cree usted que mi devolución de impuestos será de alrededor de $ 3.000? Si es así, puedo usar ese dinero cada año para pagar por adelantado equivalente a un año de alquiler en una casa móvil para que pueda continuar lo que estoy haciendo. No es la típica manera de hacer las cosas, lo sé, pero estoy tratando de evitar poner a mi hijo en una escuela pública del autismo clase, en el que no recibirían lo suficiente atención individualizada.

El año pasado mi devolución de impuestos fue $ 5.800 (federales y estatales combinados). Mi marido estaba en la militar (E-4) que hizo alrededor de $ 25.000. Tenemos un hijo y yo no estaba funcionando. Estoy seguro de que obtendrá alrededor de esa o más; ya que usted tiene un niño más y su negocio.

Tax Law, Real Estate & Credit Tips : How to Start a Tax Preparation Service

 

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home office income tax deduction

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