Preheader

 

Get A Quote About FAQ Contact Home Page
 

Life Annuities Long Term Care Identity Theft Trust & Wills

How much of their home office expenses can be deducted is one of the most misjudged tax questions faced by home workers. The reality of home office expense deductibility is much more complex than the common perception.

When Can Home Office Expenses Be Deducted?

The costs associated with maintaining a home office can be deducted only if strict IRS guidelines are met -- generally that the office is used exclusively for business purposes.

The Taxpayer Relief Act of 1997 has eased the requirements for determining if the costs associated with a home office can be deducted. The new law states that a home office qualifies as a "principal place of business" if (1) the taxpayer uses the office to conduct administrative or management activities of a trade or business and (2) there is no other fixed location of the trade or business where the taxpayer conducts substantial administrative or management activities of the trade or business.

Deductions will continue to be allowed for a home office meeting the above two-part test only if the taxpayer uses the office exclusively on a regular basis as a place of business and, in the case of an employee, only if such exclusive use is for the employer's convenience.

Home Office Deduction Limits

The home office deduction is limited to the gross income from the activity, reduced by expenses that would otherwise be deductible (such as mortgage interest and taxes) and all other expenses related to the activities that are not house-related. A deduction isn't allowed to the extent that it creates or increases a net loss from the activity. Any disallowed deduction may be carried over to future years.

Posted 10:30 AM  View Comments

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
View Our Latest Insurance News
more...
  Coverage
Home
About Us
Get A Quote
Change My Policy
Newsletters
Contact Us
Life Insurance
Annuities
Long Term Care
Identity Theft
Trust & Wills
Other Insurance Types...
Office Address
100 Franklin Street
Morristow, NJ 07960
Phone: 1-800-You-Keep
Fax: 973-547-3302
youkeepus@gmail.com
How Can We Help You?
or call us at
1-800-You-Keep
Get A Quote Videos Location Facebook Twitter Linkedin Blog RSS Feed Insurance Website Builder Facebook Twitter LinkedIn