Home Office Necessities You Can Deduct From Your Taxes

“Many taxpayers take the standard deduction rather than itemizing their tax deductions, even though some taxpayers with mortgages or home equity loans could have saved money by itemizing.”

If you are working from home, you may be able to deduct from your income shown in the tax return, home office expenses on supplies and even rent or mortgage in proportion to your workspace.

If your home office is only used for business and if it is your principal place of business, you can get a bigger tax break. It means you must spend most of the time at home by not leaving the customers or clients or patients. Most of your taxable business income must come from activities in your home office. If it comes to dispute, you must be able to show the IRS that your home office is the place you spend most of the time and it’s the most important place of doing business than any where else.

By getting the home business deduction you can take a big bite out off your taxes. There are expenses related to home business that you can deduct like furnishing, online service, and cost of equipment, office supplies, shipping, postage, memberships in qualified organizations, phone bills and magazines which are relevant to your business.

When you use a part of your home for business you are allowed to deduct a share of expenses such as mortgage payments or rent, security systems, real estate taxes, home insurance premiums, water, heat, electricity, depreciation and air conditioning, utilities and operation expenses. If your office space covers 500sq feet and the area of your home is 2000 sq feet, you qualify to deduct around 25% of the expenses. You can also deduct cost of any maintenance, repairs or improvements of your home, which will give a benefit to your home office.

The amount you deduct for home office expenses should be less than your business net income after you have deducted your expenses, such as travel expenses, supplies and phone charges. For example, if you have 500.00 as deductions the entire amount can be deducted as long as your business net profit is more than 500.00. If you use your home office exclusively for business then you can maximize you tax breaks. No tax deduction is allowed on your tax return, if you don’t have an income for the tax year.

By: Bizymoms.com Management

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