Posts Tagged ‘Home Office Tax Deduction’

Starting 2013 Claiming a Home Office on Your Taxes Will Get Easier

February 23, 2013

Starting 2013 Claiming a Home Office on Your Taxes Will Get Easier

If you claim your home office as a tax deduction, the IRS has good news for you. Starting in 2013, taxpayers who work primarily from home will have the option to use a simplified form based on their office’s square footage.

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce a lot the paperwork and record keeping burden on eligible small businesses. No longer will taxpayers who claim the home-office deduction have to keep such detailed records throughout the year, fill out lengthy forms, and calculate related expenses. However, depending on your Tax situation, it could cost you more money to use the new form, according to the “Wall Street Journal.”

The new option provides eligible taxpayers an easier path (but not necessarily the most Tax benefit method) to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 88299) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

 

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible. Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option. The new simplified option is available starting with the 2013 Tax return which most taxpayers file early in 2014. Check with your tax professional to determine which option, the new simplified form or the regular method, is right for you.
For more advice on maximizing your tax deductions, read “Make this year less taxing” from the January/February 2012 “Texas REALTOR®” magazine. To see other Hot Topics and changes in Year 2013, especially related to the Mortgages and Residential Loans, that affect the affordability and qualification of the residential home purchasers, please visit my site at  
 
          http://www.texasfivestarrealty.com/index.asp

 

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