Working class individuals who work out of their homes have found it difficult in the past to determine their home office deduction for the Internal Revenue Service. In addition, the deduction is notorious for raising red-flags with the tax bureau. However, the Internal Revenue Service states that procedure will be made easier and less cumbersome when filing taxes next season.
Looking at a deduction for your home
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The Internal Revenue Service is simplifying the procedure.
There were 3.4 million Americans in 2010 who deducted a home office on their taxes.
Working class individuals can only deduct office expenditures in a home, according to section 280A, if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer."
Once troublesome procedure simplified
Taxpayers had to fill out the 43-line Form 8829 to determine what part of the home is really deducted for the business. This was really complicated and took a ton of work.
In 2014, those calculations will be made easier. 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 change has gotten a lot of good press, specifically from the National Association for the Self-Employed.
"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 business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The Internal Revenue Service is simplifying the procedure.
There were 3.4 million Americans in 2010 who deducted a home office on their taxes.
Working class individuals can only deduct office expenditures in a home, according to section 280A, if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer."
Once troublesome procedure simplified
Taxpayers had to fill out the 43-line Form 8829 to determine what part of the home is really deducted for the business. This was really complicated and took a ton of work.
In 2014, those calculations will be made easier. 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 change has gotten a lot of good press, specifically from the National Association for the Self-Employed.
"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.
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