Home Office Deduction
According to www.IRS.Gov, you are most likely missing this…
Home office tax deduction.
If you have a space in your home that is dedicated to conducting business, then you may very well qualify for this deduction.
Today, we are diving into mistake #4 in the 5 Tax Mistakes Small Business Owner’s MUST Avoid series which is: Not Taking The Home Office Deduction
As I mentioned above, www.IRS.gov says most small businesses overlook this deduction.
The way this deduction works is…
• You track the costs of operating your home throughout the year.
• You want to track interest, insurance, utilities and maintenance.
• Your home office will represent a percentage of square feet of your home as a whole.
• You may write off the percentage of the above expenses as a home office deduction along with a percentage of depreciation.
Here is an example (with round numbers for ease of calculations)
Costs to operate: $1000
Total Square footage of home: 1000
Square footage of home office: 250 or 25% of the total square footage
Deduction: $250 + depreciation.
This allowable deduction is one available to all home based businesses that qualify.
Plug your actual numbers in and see how much you could keep in your pocket!
If your CPA is missing this, or worse advising against it, do your homework.
I’m in the camp of taking deductions when you can get them; you never know what the next year will hold.
Yes, there are situations where this deduction is not applicable but for most it is, so be sure to understand how this will apply to you.
This mistake is one in a series of 5 Tax Mistakes Small Business Owners MUST Avoid.
If you missed the previous mistakes, you can check them out below:
• Mistake #1: Not Using Electronic Filing
• Mistake #2: Not Getting Updated Information Early Enough
• Mistake #3: Not Trusting A Professional To File Your Forms And Doing It Yourself
If you feel like your accountant is not set up to give you the information you need to watch for this and other deductions…
Your needs are still small enough that you don’t really need a professional on a regular basis to help you out then I encourage you to consider two things:
1. Get your systems set up the right way so the likelihood of you doing it correctly yourself is higher
2. Have a professional review your work before submitting it to the IRS
Not sure where to get started?
I created “The Ultimate Money Management Blueprint” just for you.
I invite you to explore this step by step blueprint where I share with you the inside scoop on exactly what steps you need to take to be on the path to effortless money management in a quicker easier and more fun way!