Taxpayers who work out of their homes have found it hard previously to calculate their home office deduction for the Internal Revenue Service. In addition, the deduction is well-known for raising red-flags with the tax bureau. However, the IRS states that process will be made easier and less troublesome when filing taxes next year.
Looking at a deduction for your home
All entrepreneurs and small company owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The IRS is simplifying the process.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
The tax code section 280A claims that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer."
Not so hard anymore
It used to be that people would spend hours filling out Form 8829 in order to figure out how much of the home could be deducted from taxes. It was a long procedure.
In 2014, those calculations will be made simpler. Working class individuals can claim $5 for every square foot of the space for up to 300 square feet, or $1,500.
The IRS feels accomplished and like it has saved working class individuals millions of hours of complicated paperwork with the change.
Nice to know there is change
The National Association for the Self-Employed is pretty happy about the change, and so are others.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The 2013 returns field in 2014 will be the first returns to handle the situation.
Looking at a deduction for your home
All entrepreneurs and small company owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The IRS is simplifying the process.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
The tax code section 280A claims that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer."
Not so hard anymore
It used to be that people would spend hours filling out Form 8829 in order to figure out how much of the home could be deducted from taxes. It was a long procedure.
In 2014, those calculations will be made simpler. Working class individuals can claim $5 for every square foot of the space for up to 300 square feet, or $1,500.
The IRS feels accomplished and like it has saved working class individuals millions of hours of complicated paperwork with the change.
Nice to know there is change
The National Association for the Self-Employed is pretty happy about the change, and so are others.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The 2013 returns field in 2014 will be the first returns to handle the situation.